REPUBLIKA.CO.ID, JAKARTA -- The Financial Service Authority (OJK) has expressed hope that foreign mining companies operating in Indonesia would sell part of their shares through an initial public offering (IPO) at the country's stock exchange.

"Certainly, foreign companies that have businesses and assets, such as mines in Indonesia, are expected to prioritize launching an IPO in Indonesia to benefit our people. That would be very positive, and it is what we hope for," OJK capital market executive supervisor Nurhaida noted here on Thursday.

She remarked that the regulation, requesting companies that have been operating for a minimum of five years to divest, was positive, and the IPO mechanism could be one of the best options to meet it.

"Divestment can be carried out through an IPO, but indeed, there are several factors that need to be considered as the IPO mechanism would allow anyone to buy their shares. We will coordinate with the concerned ministries with regard to the technicalities," she claimed.

Tito Sulitio, the president director of the Indonesia Stock Exchange (BEI), pointed out that the clause on divestment is part of Government Regulation Number 23, 2010, on the implementation of the coal and mineral mining business.

"The method of divestment is not regulated, but I appeal that they should do it through an IPO at the BEI," he affirmed.

If it is done through an IPO, the people will have an opportunity to own some of the companies' shares, he noted.

At present, 16 foreign companies are planning to divest in stages in Indonesia.

"Indeed foreign mining companies could buy back the shares they have sold, but minimally, the Indonesian public will have an opportunity to own some of their shares if they would divest through an IPO in Indonesia. It will also be a good measure to build the image of our capital market," he added.

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