DBS Telkom: Hold; Rp9,200; TP Rp8,500; TLKM IJ

To transfer Flexi operation to Bakrie Telecom (BTEL)

TLKM confirmed yesterday that the company will transfer its Flexi division’s asset to Bakrie Telecom (BTEL). As per current condition, TLKM Flexi own 5,668 BTS with coverage on 330 cities in Indonesia with 15.9m subscribers and 1.3 Internet subscriber bases. Under the new arrangement, Flexi will get BTEL rights issue shares as a compensation of assets as well as human resources transfer to BTEL management. For this corporate action, TLKM has appointed UBS Securities to appraise its asset value.