PGN stake sale set for November: Minister

The government plans to sell another chunk of state gas utility PT Perusahaan Gas Negara (PGN) by November to help cover this year?s budget deficit, The Jakarta Post reported Wednesday.

?We will sell the shares in the near future - within the next three months,? State Minister for State Enterprises Sugiharto said Tuesday.

Sugiharto further said that the stake would be sold at the same time as the company wrapped up the construction of a gas pipeline from Sumatra to West Java. The pipeline project, scheduled to be up and running by December, is expected to help lift PGN?s value, with investors seeing even better earnings prospects for the company.

Construction of the pipeline began last year. The government plans to sell 185 million of its shares in PGN - or the equivalent of 5.3 percent of its shareholding valued at some Rp 2.4 trillion (US$264 million).

The government managed to raise Rp 1.2 trillion from the company?s initial public offering in 2003, although it had to cancel selling 7.3 percent of PGN last year due to strong opposition from the House of Representatives.

The government is hoping to raise Rp 3 trillion this year from the sale of state firms to plug the budget shortfall, which is expected to come in at Rp 37.6 trillion, or 1.2 percent of gross domestic product. (*)