REPUBLIKA.CO.ID, JAKARTA -- The government will privatize a number of state companies in 2016 in a bid to improve their performance and to increase the people's share ownership.
"In 2016, we will soon propose privatization of at least eight state companies through initial public offering (IPO), right issue or involvement of strategic investors," said Aloysius K. Ro, a deputy at the office of the state minister for state enterprises.
Details of privatization proposal for the eight state companies, have been submitted to the Committee for Privatization Team, which is chaired by Coordinating Minister for Economy Darmin Nasution for approval.
If the Committee of Privatization Team gave the 'green light' the next step is to seek approval from the Commission VI of the Parliament, Aloysius said here on Wednesday.
The eight companies would be divided into two groups with the first group of four companies to launch right issue -- steel maker PT Krakatau Steel proposed to be injected with Rp1.5 trillion in state capital participation (PMN), construction company PT Wijaya Karya with PMN of Rp3 trillion, toll road operator PT Jasa Marga with PMN of Rp1.25 trillion and property company PT Pembangunan Perumahan with PMN of Rp2 trillion.
Two subsidiaries of other state companies are to launch IPO.
"The names could not yet be announced , but what is certain is that one of the companies operates in agro-industry," Aloysius said.
Privatization of two other state companies PT Merpati Nusantara Airlines (Merpati) and paper producer PT Kerta Leces would be by involvement of strategic investors, he said.
He said the privatization program would be launched with thorough studies considering the market condition.
"We don't want to come in flood to the market . We hope that in the first quarter of 2016, the process of privatization has been wrapped up for some of the state companies," he said.
Merpati and Kertas Leces would come first in the program to be followed by four largest state companies with PMN and two comoanies to launch IPO, he said.
"If we can , there are state companies to launch right issue every quarter," he said.
He said two foreign investors have indicated interest in becoming strategic investor for Merpati.
"Two prospective investors have been ready to invest in Merpati. The two have the backgrounds of an airline . They could join financial service company under 'capital private equity," he said.
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