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Smooth sale prompts disbelief


Indosat: third time lucky for the
sell-off of a stake in Indonesia's
second-largest telecom

In December, observers were shocked by the actions of the Indonesian government. But for once for all the right reasons. It had managed to sell off a 41.9% stake in telecommunications operator PT Indosat to Singapore Technologies Telemedia (STT) for $631 million without any glitches.

"I'm cynical about most things that go on here. But the transaction progressed remarkably smoothly and I think the market is in a state of disbelief," says Paul Dammkoehler, co-head of equity research at Bahana Securities in Jakarta. "The bid that won was the most attractive and there were zero delays." In the past, controversy, stalling and politicking have surrounded such attempts.

It was third time lucky for Indonesia's second-largest telecom. Previous efforts to sell Indosat in 1998 and 2000 met with failure. A government attempt to sell 11% a few months earlier was also contentious. Interest from investors was at best tepid and Merrill Lynch selling 4.14 million Indosat shares the same day the government attempted to dispose of its stake didn't help.

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