Danantara Launches Bold Overhaul of 888 State-Owned Firms, Targeting Just 200 Giants
Main Takeaways
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JAKARTA, investortrust.id — Indonesia’s state-backed asset management firm Danantara has begun an ambitious overhaul of the country's sprawling network of state-owned companies, aiming to consolidate 888 entities into fewer than 200 large-scale firms. The goal is to streamline operations and create globally competitive businesses through mergers, divestments, and corporate restructuring.
The initiative, led by Danantara Asset Management Chief Executive Officer and Chief Operating Officer Dony Oskaria, marks what he described as a "revolution in state-owned enterprise management." The multiyear plan is expected to take four years and will dramatically reshape the corporate structure of Indonesia’s state-owned ecosystem.
A Deep Structural Reset
In the first phase, Danantara is conducting a fundamental business review of all existing state-owned enterprises, including subsidiaries and sub-subsidiaries—currently totaling 888 companies. Dony said the historical structure resembled a disconnected conglomerate. For example, energy giant PT Pertamina controls 260 entities, and telecommunications group PT Telkom Indonesia manages around 200—often without coordination between them.
"Now that the ownership structure is centralized under a single holding, we can execute corporate actions more decisively to consolidate and scale up these businesses," Dony said during the Economic Diplomatic Breakfast held in Jakarta on Friday, May 9, 2025.
The review includes industrial viability analysis, competitive landscape benchmarking, internal assessments of organizational capabilities, and categorization into industry-based matrices. Early findings indicate overlap and inefficiencies in sectors like logistics, where more than 16 state-owned firms operate, and insurance, which has over 15 separate entities.
Danantara plans to merge these into streamlined sector champions. For instance, logistics firms like Angkasa Pura Logistik, Kereta Api Logistik, and Pelindo Logistik could be merged into a single dominant player. Similarly, the insurance sector may be trimmed to just three core businesses: general insurance, life insurance, and credit insurance.
Redesign, Restructure, and Public Listings
Following consolidation, Danantara will redesign the business models of the merged entities. This includes reevaluating revenue streams, operational parameters, and organizational frameworks, culminating in new corporate roadmaps.
In the final phase—targeted for year three and four—many of these restructured companies will seek initial public offerings (IPOs). Danantara will assess which firms are suitable for partial privatization through public markets and which should remain fully state-controlled.
“This is the transformation we’ve envisioned since the era of former State-Owned Enterprises Minister Tanri Abeng and continued under former Deputy Minister Pahala Mansury,” Dony said.
Kadin as Strategic Partner
Danantara also plans to involve the Indonesian Chamber of Commerce and Industry (Kadin) as a key strategic partner. Smaller subsidiaries in areas like catering, bottled water, and printing will be phased out or spun off. Meanwhile, more than 130 state-owned hotels will be unified under a single hospitality firm, opening the door for partnerships with private businesses.
“There will be a memorandum of understanding between Danantara and Kadin. We cannot carry out this restructuring alone—we must work with Indonesian entrepreneurs,” Dony emphasized.
Fixing Financially Distressed SOEs
As part of the restructuring, Danantara is also addressing loss-making firms. Dony cited Garuda Maintenance Facility (GMF) as a turnaround example. Once burdened with negative equity despite healthy cash flow, GMF is now positioned for recovery through a redesigned corporate structure.
In another case, Citilink—burdened by debt to Pertamina—will undergo a debt-to-equity swap, making Pertamina a shareholder. Danantara will then inject capital into Pelita Air, another Pertamina subsidiary. Ultimately, the equity in Citilink, Pelita, and Garuda Indonesia will be aligned under a healthier structure.
“I will withdraw the capital placed in Pertamina and reallocate it to Garuda. As a result, Garuda becomes equity-positive and owns both Pelita and Citilink. That’s how quickly we can fix the balance sheets. This is the revolution in managing state-owned enterprises,” said Dony.