Qtel’s purchase of Indosat ‘legal’

Qtel’s US$1.8 billion cash purchase of Indosat in Indonesia earlier this month looks likely to go ahead, subject to a Supreme Court ruling, after Indosat’s vice president Jusuf Kalla confirmed the deal was legal.

“The deal is just business as usual for overseas buyers. As the owners of the shares are in Singapore, the transaction is legitimate,” Kalla stated.

However, Kalla said Qtel must make a tender offer asking all existing shareholders whether they are interested in the same offering price.

According to press reports in Indonesia the deal came under scrutiny after a Central Jakarta District Court ruling found a company called Temasek – including one of its subsidiaries that partly owns Indosat – guilty of anti-competitive behaviour in Indonesia’s telecoms industry.

Temasek owns Singapore Technologies Telemedia (STT), which has a joint subsidiary with Qtel called Asia Mobile Holdings (AMH), and which confirmed it would sell its 40.8 per cent stake interest in Indosat to Qtel, giving the Qatari company majority ownership.

Temasek also owns a 54.14 per cent stake in SingTel, which holds a 35 per cent stake in Telkomsel, Indonesia’s largest mobile operator.

The court offered Temasek a choice of relinquishing at least 50 percent of its shares in both Telkomsel and Indosat or selling all of its shares in one of the companies within two years of the verdict.

Qtel chairman Sheikh Abdullah Al-Thani said his company was aware of the legal process involving the shares in Indosat and that it would abide by the Supreme Court’s ruling.

Al-Thani said the company was delighted to increase its strategic stake in Indosat and that the transaction demonstrated Qtel’s commitment to Indonesia and its rapidly developing infrastructure.

“With this transaction, Qtel Group will service nearly 44 million customers in 16 countries. We look forward to working with the management and employees of Indosat and applaud them for their excellent record,” Al Thani stated.

A statement by Qtel said this transaction would not affect STT and Qtel’s holding in AMH or investments in other markets, and that STT will no longer have any involvement in Indosat.