Qtel to up stake in Indonesian firm to 65%

Telecom company is looking to increase shares in Indosat to 65%, tender Jan. 20.

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By  John Irish and Raissa Kasolowsky Published  January 18, 2009

Qatar Telecommunications Co (Qtel) said on Saturday it would begin tender offers for shares in Indonesian telecoms firm PT Indosat on Tuesday to lift its stake to 65 percent, the maximum allowed.

Indonesia limits foreign ownership in the telecommunication sector to a maximum of 65 percent for mobile phone operators and 49 percent for fixed-line operators.

Two tender offers would begin concurrently in Indonesia and the United States at 7,388 rupiahs ($0.661) per share and would expire on Feb. 18, Qtel said.

"The Indonesian government has determined that Qtel's total ownership will be limited to 65 percent of Indosat," Qtel said in a statement.

"Guided by this ruling, Qtel is thus offering to acquire an additional stake of up to approximately 24.19 percent of Indosat, after taking into account its existing 40.81 percent indirect stake in Indosat," Qtel said.

Qtel bought a stake in Indosat, the country's second largest mobile phone operator, from Singapore Technology Telemedia for $1.35 billion in June, increasing its ownership of the company to 40.81 percent from around 10 percent.

Indonesia's communications minister specified last year Qtel should not control more than 65 percent of Indosat and that it had to separate its mobile and fixed-line business in two years.

However, earlier this month Indonesia's capital market regulator, Bapepam, said Qtel could hold a tender offer without having to spin off Indosat's fixed-line business afterwards.

Indosat's main revenue-earner is its mobile phone business, but it also has a fixed-line operation. (Reuters)

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