MARKET DEVELOPMENT
Indonesia Minister Wants State Firms to Bulk up Capital for Growth
Indonesia Minister Wants State Firms to Bulk up Capital for Growth
30/01/2015 (Reuters) - Indonesia will encourage state enterprises to boost their capital through debt or rights issues to enable them to contribute more to economic growth, State Enterprises Minister Rini Soemarno told Reuters on Thursday.
Export-oriented state firms such as palm oil producers can issue dollar-denominated debt in the global market to increase their downstream processing capabilities, Soemarno said.
Other funding options include government cash injections, bank loans or money from regional investors, she added.
"I am convinced that we can build this country, and we can push for growth across Indonesia through SOEs," Soemarno said in an interview. "But the capital owned by SOEs right now is not enough if we want to push for growth aggressively."
Soemarno, a former head of Indonesia's biggest car distributor PT Astra Internasional Tbk (ASII.JK), said she was "not too keen" on offering stakes in state enterprises via initial public offerings as that would dilute the government's control.
The ministry was considering injecting around 500 billion rupiah ($40 million) into struggling state airline PT Merpati Nusantara Airlines to help it resolve payroll issues ahead of potentially offering it to strategic investors, Soemarno said.
"If we can resolve that (unpaid salaries), investors might be more interested. Right now there is no investor because Merpati has a huge problem with its employees," Soemarno said.
Since taking office under President Joko Widodo's administration in October, Soemarno has made bold moves to reform Indonesian state enterprises, such as dismissing the entire board of directors at state energy giant PT Pertamina [PERTM.UL].
There are 119 state enterprises, of which 20 are listed companies, according to the state enterprises ministry. State firms are estimated to contribute around 150 trillion rupiah ($12 billion) to the government's 2014 income through dividend payments and taxes.
The biggest state firms include PT Bank Mandiri Tbk (BMRI.JK), cement producer PT Semen Indonesia Tbk (SMGR.JK), toll road operator PT Jasa Marga Tbk (JSMR.JK) and telecommunication operator PT Telekomunikasi Indonesia Tbk (TLKM.JK).
($1 = 12,520.00 rupiah)
Export-oriented state firms such as palm oil producers can issue dollar-denominated debt in the global market to increase their downstream processing capabilities, Soemarno said.
Other funding options include government cash injections, bank loans or money from regional investors, she added.
"I am convinced that we can build this country, and we can push for growth across Indonesia through SOEs," Soemarno said in an interview. "But the capital owned by SOEs right now is not enough if we want to push for growth aggressively."
Soemarno, a former head of Indonesia's biggest car distributor PT Astra Internasional Tbk (ASII.JK), said she was "not too keen" on offering stakes in state enterprises via initial public offerings as that would dilute the government's control.
The ministry was considering injecting around 500 billion rupiah ($40 million) into struggling state airline PT Merpati Nusantara Airlines to help it resolve payroll issues ahead of potentially offering it to strategic investors, Soemarno said.
"If we can resolve that (unpaid salaries), investors might be more interested. Right now there is no investor because Merpati has a huge problem with its employees," Soemarno said.
Since taking office under President Joko Widodo's administration in October, Soemarno has made bold moves to reform Indonesian state enterprises, such as dismissing the entire board of directors at state energy giant PT Pertamina [PERTM.UL].
There are 119 state enterprises, of which 20 are listed companies, according to the state enterprises ministry. State firms are estimated to contribute around 150 trillion rupiah ($12 billion) to the government's 2014 income through dividend payments and taxes.
The biggest state firms include PT Bank Mandiri Tbk (BMRI.JK), cement producer PT Semen Indonesia Tbk (SMGR.JK), toll road operator PT Jasa Marga Tbk (JSMR.JK) and telecommunication operator PT Telekomunikasi Indonesia Tbk (TLKM.JK).
($1 = 12,520.00 rupiah)