Qatar Telecom Gets Clearance to Increase Indonesian Investment

Qatar Telecom (QTel) has confirmed that it will increase its holding in Indonesia's Indosat to 65% following a clarification about foreign investor rules from the Indonesian government. The authorities have agreed to allow Qtel to own up to 65 percent of Indosat, while removing a previously discussed condition that Indosat would transfer its fixed business into a separate company.

Qtel paid US$1.8 billion to buy Asia Mobile Holding, which was a holding company for a stake in Indosat. Previously, Qtel held one-quarter of Asia Mobile's stake, while three-quarters was owned by Singapore Technologies Telemedia.

Indosat holds a landline license, and hence the 49% restriction applied, whereas if the firm had been a mobile only operator - then Qtel could have increased its stake to 65% without any controversy.

The government has now clarified that it can increase the holding to 65% - and QTel says that it will tender for the remaining shares in a deal worth around US$870 million.

Qtel Group Chairman and Indosat President Commissioner H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al Thani said: "We are pleased to be in a position to move forward with this tender offer with IndosatÃ's integrated business intact. This puts Indosat in a great position to compete aggressively in the future. We now feel more assured and comfortable paying the agreed tender offer price of 7,388 rupiahs per share."

The government owns a 14.3% golden share which can't be touched.

Posted to the site on 29th December 2008