Indonesia Pushes State-Owned Industry Consolidation and IPO Plans
None of the state tourism and food holding companies are publicly listed.
The launch of the two holding entities is the latest move in the SOE ministry’s consolidation push, which in the past two years has included the establishment of several other holdings in sectors such as “ultra micro” loans, electric vehicle batteries, insurance, pharmaceuticals and hospitals. Ministry officials also have mentioned plans to form at least two other state holdings covering the defense industry and geothermal companies.
Thohir, since taking office in late 2019, has complained about the bloated structure of SOEs, saying that they, their subsidiaries and sub-sudsidiaries number more than 800. In November, he said he had permanently shut 70 chronically poor-performing SOEs, leaving a total of 41.
Despite the poor performance of many SOEs, they continue to play crucial roles in Indonesia’s economy. Some, like oil and gas company Pertamina and electricity utility Perusahaan Listrik Negara — both fully owned by the state — remain the biggest companies in Indonesia by assets and revenue.
Thohir told local reporters that the ministry is also planning to form two subholdings of PLN, which holds a monopoly over Indonesia’s power sector, with one subholding to take care of retail and the other the power plant business. That follows PLN’s recent coal supply crunch, which led to the government’s ban on coal exports through the end of January, recently relaxed for some exporters who have met their domestic market obligations.
Apart from the consolidation, the ministry will proceed with its IPO plans for some SOEs or their subsidiaries. Thohir told lawmakers last month that the IPO of Pertamina Geothermal Energy, the geothermal unit of Pertamina, is slated for the second quarter. Another SOE ministry official said the ministry is considering an IPO for Pertamina’s upstream subsidiary, Pertamina Hulu Energi, for later this year.
That follows the successful listing of Dayamitra Telekomunikasi, or Mitratel, a tower subsidiary of the country’s largest telecommunications company, state-owned Telekomunikasi Indonesia, which raked in 18.34 trillion rupiah ($1.28 billion) in November, the second largest IPO fundraising in the history of the Indonesia Stock Exchange, after that of local e-commerce unicorn Bukalapak earlier in 2021.
