Govt to divest 40 percent stake in Merpati

Jakarta (ANTARA News) - The government intends to divest its 40 percent stake in PT Merpati Nusantara Airlines next year as part of efforts to strengthen the company`s capital structure and make it the country`s third largest airline.

"Merpati will be privatized through direct placement starting in the middle of next year," Merpati President Director Hotasi Nababan said after signing a memorandum of understanding with Antara news agency on Thursday.

Domestic and foreign investors including airline and leasing companies had expressed interest in bidding for the government`s stake, he said.

He also said Merpati would gradually divest its 49 percent stake in its subsidiary, Merpati Maintenance Facility (MMF). "So, Merpati`s stake in MMF will eventually be only 51 percent."

He said Merpati would also reopen its traditional routes, increase flight frequencies and open feeder routes under its business expansion program.