Indonesia plans to list part of state-owned oil group Pertamina this year, stepping up its push for partial privatization as part of reforms to its $606 billion state-owned enterprise sector.
An initial public offering of Pertamina Geothermal Energy, which uses seismic heat to generate electricity on an archipelago dotted with volcanoes, could value the company at up to $2 billion, depending on market conditions, people familiar with the matter said. an official said.
State-Owned Enterprises Minister Erick Thohir said the proposal would spearhead other capital raises and strategic partnerships planned for government-controlled companies. PertaminaPertamina Hulu Energi, the exploration and production arm of .
“This is one of the first sub-holdings. [subsidiaries] In an interview with the Financial Times at the minister’s residence in Jakarta, Tohir said, IPO It was scheduled for November or December.
IndonesiaThe country’s state-owned enterprises hold assets equivalent to about half of the country’s $1.2 trillion gross domestic product, from telecommunications and oil to cement and hotels. Last year, total revenue was about $155 billion and net income was $8 billion.
To increase their efficiency, Tohir, a businessman, and Former owner of Italian football team Inter Milanconsolidated 108 companies into 41 companies and placed them in 12 business clusters.
The goal is to develop more companies on a global scale. Last year, Indonesia had only one Fortune 500 company, his. It’s pertamina.
“I want to encourage more SOEs to become top 100 or 500 companies in the world,” said Thohir.
The ministry said it was planning 14 IPOs under the reforms, starting with the $1.3 billion listing of telecom tower firm PT Dayamitra Telekomunikasi on the Indonesian stock exchange last year.
After Pertamina Geothermal, Pertamina Hulu could go public next year, and petrol and gas logistics company Pertamina International Shipping could also hold an IPO or acquire a strategic partner, Thohir said. I have.
The government is also looking for foreign partners to invest in International Healthcare Co, a merger of state hospitals of various companies that has become the country’s largest hospital operator.
IHC is looking for a partner for a ‘Health Tourism’ center in Bali. The US-based Mayo Clinic is an advisor on this project.
Analysts said Indonesia’s state-owned enterprises are attractive partners for foreign investors in geopolitically sensitive industries such as mining.
South Korea’s LG Energy Solutions and China’s CATL recently signed contracts for nickel supply with state-owned Indonesian Battery Corporation and Aneka Tambang.
Kyung-hoon Kim, an associate research fellow at the Korea Institute for International Economic Policy and a longtime Indonesia watcher, said, “Global companies feel at ease when they talk to state-owned enterprises, saying, ‘These natural We guarantee the supply of resources.”
Muralidharan Ramakrishnan, senior director at Fitch Ratings, said the separate listing of some entities would make them more attractive, especially to green energy companies like Pertamina Geothermal. He said it could improve access to funding.
However, he noted that it could be some time before the reforms flagged in 2017 are implemented.
“The big question is when and how,” Ramakrishnan said.
His brother’s appointment of a prominent businessman like Thohir, who runs one of Indonesia’s largest coal companies, as minister also raises questions about the need to ensure transparency and non-favourites. said Kim.
Other analysts said consolidation and IPOs alone cannot guarantee proper reform. Siwage Dharma Negara of his Indonesian Studies Program at his Iseas-Yusof Ishak Institute in Singapore said:
https://www.ft.com/content/2fc71ec8-0502-428d-9aa3-63c75df043e1 Indonesia to list unit of flagship oil group Pertamina this year