Government drafts regulation on holding companies

The government is currently in the process of finalizing a proposed regulation to set up six holding companies for state-owned companies including for oil and gas companies and mining companies.

The office of the Cabinet Secretary said in a statement obtained Saturday that state-owned oil and gas firm PT Pertamina has been appointed to become the holding company for state-owned oil and gas companies, while aluminum producer PT Indonesia Asahan Aluminium (Inalum) for state-controlled mining companies.

The statement said that the Office of the Coordinating Minister for Economy and the Cabinet Secretary are currently synchronizing and harmonizing the draft regulation before approval by President Joko Widodo.

The statement also said that the holding companies are owned 100 percent by the government, and that the holding firms must have at least 51 percent interest in their respective subsidiaries.

As has been previously reported, state-controlled gas distribution firm PT PGN Tbk, which is listed on the Indonesia Stock Exchange, will become a subsidiary of Pertamina once the holding company is realized.

Meanwhile, Inalum will become the holding company for several state-controlled mining firms including PT Bukit Asam Tbk, PT Aneka Tambang Tbk, and PT Timah Tbk, all of which are also listed on the IDX.

Editing by Reiner Simanjuntak