TREASURY SHARES FINALE DILEMMA: RECKONING THE ACCEPTABLE DIVERSION STRATEGY OF PT. TELEKOMUNIKASI INDONESIA FROM SHAREHOLDER PERSPECTIVE

• Main Author: HAMIDANI PUTRI 29116502, ARDYANA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/25733
• Institution: Institut Teknologi Bandung

According to the corporate actions, PT. Telekomunikasi Indonesia has been repurchase 1.010.930.460 shares (before the stock split 1:5) gradually through programs of repurchase shares. In 2014 until 2016, PT. Telekomunikasi Indonesia already diverts 1.961.363.000 treasury shares and left 1.737.779.800 shares. According to Indonesian Financial Services Authority No.30/POJK.04/2017 in Part IV and Article 14-17, that regulate the treasury shares can only hold by the company within 3 years and extend for 3 years. In this case, PT. Telekomunikasi Indonesia holds the treasury shares from 2011, it means Telkom has been controlling treasury shares 6 years and must be retire year. According to the regulation, Telkom Indonesia must retire the treasury shares at the latest in November 2018. Telkom Indonesia should take the ending strategy of retirement treasury shares before the due date. The proposed strategy must be followed the existing regulations and provide benefits for the company. <br /> <br /> In OJK regulation, Article 17, the treasury shares may be diverted by resale in the stock exchange and/or cancel by means of capital reduction. Based on the consideration of some alternative solution, the proper diversion of treasury shares is cancellation. The first reason for the cancellation of treasury shares is due to the current downtrend market situation and close to the due date. Then, this solution is not effect on the earnings per share (EPS), return on equity (ROE), and on the balance sheet will occur a contra-equity account without change the total equity. Based on the FCFF analysis, cancelled the treasury share will not decrease the firm value. <br /> <br />