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June 10, 2008

QTel to raise Indosat stake despite trust ruling

Qatar Telecom will go ahead with a tender offer to raise its stake in Indonesia's second-largest mobile phone operator, PT Indosat Tbk, reported Reuters.

The company made the decision despite the country's competition watchdog saying the proposed deal violated a court ruling. Qatar Telecom, which said on Saturday it will acquire Singapore Technology Telemedia's entire stake in Indosat for $1.35 billion, currently owns around 10 percent of the company.

If the deal - which has the Indonesian government's blessing - goes ahead, the Middle East company will own a 40.8 percent stake worth $1.8 billion.

The sale by ST Telemedia - a unit of Singapore's sovereign wealth fund Temasek Holdings - comes almost a month after it lost an appeal in an Indonesian court against an earlier anti-trust ruling.

The Singapore state investor has denied engaging in anti-competitive behaviour, saying its affiliates owned minority stakes in both mobile operators.

An Indonesian district court on May 9 ordered Temasek and its affiliates to sell their holdings in either PT Telekomunikasi Selular (Telkomsel) or PT Indosat Tbk , upholding an earlier ruling by the country's anti-trust body, or KPPU.

The ruling said Temasek should sell its stake to a number of investors which are not affiliated to each other and each buyer can only acquire a maximum 10 percent.

State Enterprises Minister Sofyan Djalil told reporters the government will not stand in the way of the Middle Eastern investor.

"We are happy with QTel's plan to increase its stake in Indosat," He said QTel's plan could open more doors for Middle Eastern investors to come to Indonesia.

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