English Task
Paper
UNSTABILIZED OF FLEXI-ESIA MERGER
Group :
Sulhi Husni
Dian Mega Rizky
Resty Yosna Panimba
Deo Denisa
3A-D4
ACCOUNTING DEPARTMENT
POLYTECHNIC STATE OF UJUNG PANDANG
2013
CHAPTER I
INTRODUCTION
1.1.
Background
Along with the
development of the Indonesian economy, the competition in the world business also strongly felt by
entrepreneurs. That requires the government to prepare a legal means that the
national economic system can follow the era of globalization the world. Growing
economic growth led to the establishment of national companies. For that a lot of business people or
entrepreneurs trying to strengthen its business.
In his efforts to
strengthen many business people or entrepreneurs who formed a partnership
between the companies. Form
of cooperation is one of the company's merger. This is the attempt made by two
telecom companies namely PT. Telkom (Flexi) and PT. Bakrie Telecom (Esia). Two telephone service provider based Code
Division Multiple Access (CDMA) has a very large number of customers. Esia
subscribers recorded 11.1 million subscribers while Flexi 16.2 million. Merger of the two telecom operators that will
consolidate 27.3 million or approximately 83.23% of the total CDMA subscriber. However,
in the process of merging the two companies, there are many obstacles that led
to the merger plan has
not been realized untilnow.
1.2.
Problem Statement
Of matter / topic of this paper, we can formulate the problem as
follows: What
caused unstabilized
of Flexi-Esia merger?
1.3.
Objective Of The Writing
From the above formulation of the
problem we conclude the objective
of this paper. As follows:
To know
the cause unstabilized
of Flexi-Esia merger.
1.4.
Significant Of The Writing
From the above formulation of the
problem we conclude the significant
of this paper. As follows:
In order that we know what caused
uncertain of FLEXI-ESIA merger
CHAPTER
II
DISCUSSION
2.1. Pertinent
Ideas
2.1.1. Definition of merger
Merger is a diffusion process with one
of the company's two of them remained standing as company
while others disappeared with all his wealth and name included in the company's
stand.
Merger or Merger of
companies known as the Law No.. 1 Tahun1995 of the limited liability company .
In Chapter VII, Article 102 point (1) states as follows:
"One or more of the company may merge into one with a
company that already exist or merged with
another company and form a new company." In this case the merger is defined as a
merger of two or more companies to retain one company with other companies
liquidate or dissolve the merge. The incorporation of another company that
combines in a single company that has been there
before. Definition of merger are then loaded specifically in the Government
Regulation No.27 of 1998 dated February 24, 1998, the merger, consolidation and
acquisition of limited liability, which sounds full as follows: "Merger is a legal act performed by
one (1) or more to the company merged with another company who has been there
and subsequently joined the company to be dissolved." Merger or business combination is one
form of corporate restructuring that has strong appeal in the circle of
business and entrepreneurs. The merger process involves various aspects,
including the legal aspects of the merger process even accompany the beginning
of the
process until the end
of the process.
2.1.2.
Terms of Merger
J.Johnson
Hazel (1995) states, a prerequisite that must be analyzed first from the second
bank to be merged are:
1. The financial condition of each company,
merged its fellow healthy.
2. Capital adequacy.
3. Management either before or after the merger.
4.
Whether
the merger can be a member benefit for users of the company's services.
Johnson further stated that each institution will be
merged, in general, has some important issues that are relevant to be analyzed
before the merger is done, among others:
1. When the time is right for a merger?
2. How to identify a match pair (merger) to
partner?
3. How to communicate well on the merger plan to
all interested parties that the merger intentions have a positive impact on the
market?
4.
How do the ways that will be done to
consolidate the merger between the companies?
2.1.3.
Merger Rationale
a. Tax Considerations
Tax
considerations have prompted the happening of a merger. For example, companies
are profitable and are in the highest tax ranges can acquire a company that has
accumulated tax losses in large numbers. These tax losses can then be directly
converted into tax savings rather than taken to the next year and used in the
future. If the company lacks internal investment opportunities when compared to
free cash flow is available, then the company can (pay additional dividends,
(2) investing in securities, (3) buy back shares, or (4) buy another company.
b. Purchase of assets under replacement region
Sometimes
a company will be regarded as acquisition candidates because of the cost of
replacing assets is much higher than its market value. For example, in the
early 1980s, oil companies can buy back at a cheaper price by buying other oil
companies rather than doing exploratory drilling.
c. Diversification
The
manager is often mentioned as one reason for the diversification of the merger.
They argue that diversification will help stabilize the company's profits and
consequently benefit the owners. Stabilization advantage is that it is definitely
beneficial for employees, suppliers and customers, but from the point of view
of shareholders, stabilization is less certain value.
d. Personal incentives managers
Like
financial economics argues that business decisions are based solely on economic
considerations alone, especially in terms of maximizing the value of a company.
However, many business decisions are based on the fact more personal
motivations of managers in the economic analysis. Personal considerations will
be blocking it also can motivate mergers. After most of the takeover, some
managers of the acquired companies lost their jobs, or at least their autonomy.
Therefore, the managers who have less than 51% shares of the company they are
trying to find a way that will minimize the chances of a takeover it.
Defensive merger as it is very difficult to be maintained based on economic
reasons.
e.
Residual Value
Company
can be judged from its book value, economic value, and replacement value. More
recently, the takeover specialist companies have started to recognize nilain
residue as one of the other bases for valuation.
2.1.4.
Types of Mergers
Mergers have some kind of, among others:
1.
Horizontal
merger, the merger is carried out by a similar business (its the same), for
example, a merger between the two companies bakery, shoe company.
2.
Vertical
mergers, which are mergers between firms that are interconnected, for example
in the production flow sequence. For example: yarn spinning company merged with
fabric companies, tire companies merger with the company car.
3.
Conglomerate
is the merger of various companies that produce a variety of different products
and have nothing to do, such as shoe firm merged with electronics company or a
car company merged with food companies. The main goal is to achieve growth
conglomerate enterprises quickly and get better results. The trick is that the
exchange of shares between the two companies merged.
2.1.5. Preparations
before merger
a.
The
professional designation
This
professional party is the party that has a specific expertise or experience certain
designated to provide products and services involved in the preparation, the
merger transaction. The professional party include accountants, legal counsel,
corporate appraisers, notaries, tax consultants, and financial advisors.
b.
Legal
Due Diligence
Merger
involving at least two companies will not work properly if the company is not
done checking legal aspects. This is done by a legal consultant (lawyer) who
came to the company to check the special archives and conduct legal audit, to
look at the feasibility of the company.
c.
Preparation of Proposed Plan of Merger, the
Merger Plan and Draft Certificate of Merger.
In
the preparation of this proposal is the responsibility and duties of the Board
of Directors of each major corporate merger, and was hold
Directors meeting for the proposed plan of merger agreement.
d.
Submission of the Draft Merger to Creditors.
Creditor
is a party to quite important and determine the success of the merger. After
the meeting of the Board of Directors of the design submitted to the creditors.
This stage is a crucial stage can be implemented or not, because if there are
objections from creditors, the merger can not be done.
e.
Implementation of the General Meeting of
Shareholders
General
Meeting of Shareholders (AGM) in preparation for the implementation of the
merger plays an important role, there is no merger without the approval of GMS.
This is the highest decision in the meeting, where shareholders must present
two thirds of the number of shareholders.
2.2.
Analysis of Issues
2.2.1.
Cause unstabilized of merger flexi-esia
Merger
plan PT. Telekomunikasi Indonesia Tbk. (Flexi) and PT. Bakrie Telecom Tbk.
(BTEL) terelesiasi fact not until now. This is caused by several factors, among
others:
a)
Telkom
Flexi, which is still a business unit of Telkom should break away and turned
into a company. The discharge process will take approximately 4 months with
details, 2 months and 2 months of internal settlement in the judiciary. After
changing status to PT. Telkom Flexi, the merger can be implemented.
b)
The
refusal of the various parties to factors not realize this merger. Highly
counter-party to this plan is the United Employees of PT Telekomunikasi
Indonesia Tbk (Telkom Sekar). The reason, Sekar see no sufficient reason to
merge, both in terms of financial, social aspects, aspects of risk management
and human resources, especially aspects of existence. Union employees of PT
Telekomunikasi Indonesia Tbk. (Sekar) expects the SOE directors to be elected
at the EGM December 17 is a figure that anti-sale of state assets, particularly
anti TelkomFlexi Division sales in the pretext of merger Flexi-Esia Bakrie
Group subsidiary. When Telkom directors elected at the EGM later forced the
merger, Sekar will continue to do actions such as demonstrations and strikes union.
Sekar suspect after being released to the national private sector, Flexi will
be sold again to the foreign private sector. Sekar also suspects political
pressure because Flexi which is a strategic state assets and productive with
incomes above 3 trillion per year.
c)
In addition, this merger triggers a monopoly
in the fixed wireless market acces (FWA) based Code Division Multiple Access
(CDMA). As set forth in the PP. 57/2010 regarding the Merger or Consolidation
of Business Entities and Acquisition of Shares of the Company which may result
in Monopolistic Practices and Unfair Business Competition. Both telecom
companies that control more than 80 percent of customers FWA in Indonesia.
Flexi has 16.2 million subscribers, while Esia approximately 11.1 million. The
same goes for the amount of infrastructure Base Transceiver Station (BTS).
Flexi BTS 5600 while Esia has more than 4,000 units of BTS. Business
Competition Supervisory Commission (KPPU) as authorities netted Telkom and
Bakrie order to do consultation.
d)
In addition to the creation of opportunities
monopoly case, there is another problem facing discourse merger Flexi-Esia.
Telkom and BTEL yet reported their merger plans. In fact, they have exceeded
the threshold required to report the proposed merger of Rp 2.5 trillion in
total assets and Rp 5 trillion to the total turnover. The regulations contained
in Government Regulation (PP) No. 57/2010 regarding the Merger or Consolidation
of Business Entities and Acquisition of Shares of the Company are set so that
the merged company to report to the Commission. The merger PP directly to
arrange for a company that has been merged. However, for companies that would
merge report also recommended when a large business potential. Therefore, if
one day the merger violated the rules, can be canceled and cause high costs.
e)
There
is still much work to be done, from compliance to regulatory affairs, when the
deal will be realized, how the shape of the merger, how the value of the
transaction, until the transition and implementation of the course will involve
non-technical factors such as human resources, the establishment of a new
corporate culture, operational in the center and the regions. To this day, have
not heard an official stance against the proposed merger of telecommunications
regulator Flexi-Esia. Maybe they are waiting for official notification or
perhaps because of regulations on mergers and acquisitions in the
telecommunications industry in Indonesia is not yet available. It points to
consider related to the regulation that could hinder the process of merging
among other licensing issues, resources frequencies, numbering,
interconnection, and customer protection. Another thing that is currently not
visible but can be a stumbling block to the successful incorporation of
Flexi-Esia, especially after the signing of the agreement, is the corporate
culture and human resources that have a different character. Often mergers and
acquisitions affect employees does rationalizing. Naturally, when emerging
resistance by some employees who feel threatened position and fate. In
addition, work culture SOEs (Telkom) and private (BTEL) of course different.
This distinction if not managed properly can be
a threat to the survival of the newly formed company.
CHAPTER
III
CONCLUSION AND SUGGESTION
3.1.
Conclusion
The uncertain Flexi-Esia
merger caused by some case,
a. Telkom Flexi formless as a company and
still be a unit of PT. Telkom Indonesia so that the merger can not be done.
b. Employee unions PT. Telkom rejected the merger
because Sekar see not reason enough to do a good merger of the financial,
social aspects, aspects of risk management and especially the aspect of
existence.
c.
Flexi-Esia merger could lead to a monopoly in the fixed
wireless market acces (FWA) based Code Division Multiple Access (CDMA). If the
merger is implemented so that both the telecom companies would control more
than 80 percent of customers FWA in Indonesia.
d. Telkom and BTEL yet reported their
merger plans. In fact, they have exceeded the
threshold required to report the proposed merger of Rp 2.5 trillion in total
assets and Rp 5 trillion to the total turnover.
e.
In addition to the problems mentioned above, there are many
other things that hinder the merger process, among others, licensing issues, resources
frequencies, numbering, interconnection, and customer protection. Another thing
that is currently not visible but can be a stumbling block to the successful
incorporation of Flexi-Esia, especially after the signing of the agreement, is
the corporate culture and human resources that have a different character.
3.2.
Suggestion
Flexi-Esia merger plan must
be given special attention by the government because it concerns the welfare of
the majority as defined by the Act. In addition, the state should rethink the
merger plan because it can lead to the takeover of PT Telkom Indonesia from the
State moved to private.
