Govt supports Indonesia Power's plan to go public

The government, in this case the Ministry of Energy and Mineral Resources, gives full supports for Indonesia Power's plan to go public by holding initial public offering of shares (IPO) to the public through stock exchanges.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro, nevertheless, asked Indonesia Power, a subsidiary of state electricity company PT Perusahaan Listrik Negara that control power generation in Java and Bali, to meet all the requirements for an IPO.

Purnomo added that his office would facilitate the process of floating Indonesian Power on stock markets should the company's board of commissioners approve the IPO plan.

"If Indonesian Power meets all the requirement to be privatized, and if this privatization plan has been by its board of commissioners, we, as the technical ministry (overseeing Indonesian Power) will follow suit," Purnomo said.

He noted that his office would not involve in detail preparation and evaluation of the company in pursuing its IPO plan, but would only provide conducive regulation in the electricity sector.

The government's involvement in Indonesian Power would be represented by the company's board of commissioners, and therefore, the decision by the board would represent the government's decision.

"I have no objection (with the IPO plan). The problem is that I'm from the technical ministry involving only in the provision of regulations, as we are the regulator," Purnomo added.

But Purnomo noted that IPO was not the only way for Indonesian Power to raise fresh funds to finance its huge investment needs in the coming years. Another way that could also be pursued by the company is through direct investment or direct placement by inviting strategic investors.

When asked should the government maintain its controlling stake at Indonesian Power after the privatization, Purnomo said he had no answer and would let the Ministry of Finance to decide.

Earlier, Indonesia Power corporate secretary Lili Tjarli Tahlan said the company was ready for IPO, as it had been preparing that since 1996, when the company appointed a domestic consultant to appraise the company. And according to the evaluation of that consultant, Indonesia Power qualifies to go public because of its good performance.

The company recorded profits of Rp 250 billion last year, and this year the company expects to book profits of between Rp 350 billion and Rp 400 billion. Meanwhile, the company's total assets, after PLN assets revaluation, are estimated to reach Rp 39 trillion. (*)