Acquisitions need ministry's approval<\/p>\n
JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
\nsays the direct acquisition of an interest in a forest
\nconcessionaire may be made only with his prior approval.<\/p>\n
\"If an acquisition involves a forest concessionaire, it must
\nbe approved by the minister of forestry. But if it concerns a
\ncompany's wood-based plant, for instance, it doesn't have to deal
\nwith my office,\" he said on Monday.<\/p>\n
Djamaludin was commenting on the plans of PT Artika Optima
\nInti (AOI), a subsidiary of the Djajanti Group, to raise US$147
\nmillion from the sale of 31.86 percent of its shares to Kramat
\nTin Dredging Bhd. of Malaysia.<\/p>\n
AOI's plywood subsidiary, whose plans to go public failed to
\ngain a recommendation from the forestry ministry last year, is
\ncurrently submitting a renewed proposal to the Capital Market
\nSupervisory Agency that it be listed on the Jakarta Stock
\nExchange.<\/p>\n
Kramat Tin announced last week that Malaysia's securities
\ncommission had already approved the company's acquisition plan.<\/p>\n
According to a statement made available to The Jakarta Post on
\nMonday, Kramat Tin, which is listed on the Kuala Lumpur Stock
\nExchange, intends to penetrate the Indonesian market through the
\nacquisition.<\/p>\n
Under the rules of the Malaysian securities commission, if the
\ninitial public offering price of AOI shares on the Jakarta
\nexchange is less than M$3 per share, the owner of the Djajanti
\nGroup, Burhan Uray, must pay the difference to Kramat Tin.<\/p>\n
Uray is also required to give a guarantee that the after-tax
\nprofit of AOI is not less than M$127,325,000 per annum and must
\npay any shortfall that arises to Kramat Tin, up to the equivalent
\nof the equity interest of Kramat Tin in AOI.<\/p>\n
The profit guarantee would be for a period of three financial
\nyears, starting from the year in which Kramat Tim's proposal is
\nrealized.<\/p>\n
Halt<\/p>\n
Plans of AOI's plywood subsidiary to go public ran aground
\nlast year when Djamaludin said that the company had failed to
\nmeet a number of requirements, among them the construction of a
\nwood processing plant in Irian Jaya, where its concession is
\nlocated, and the provision of details about the source of the raw
\nmaterial use by its plywood mill in Maluku.<\/p>\n
Djamaludin refused to grant the company a recommendation to go
\npublic, notwithstanding that the firm had already received the
\ngo-ahead from the Capital Market Supervisory Agency.<\/p>\n
Djamaludin acknowledged on Monday that a recommendation from
\nhis office was not a prerequisite for forest-related companies to
\ngo public.<\/p>\n
\"The only recommendation will be from the public. A
\ntransparent presentation by the company will allow the public to
\njudge for themselves whether or not they are willing to buy the
\ncompany's shares... They can make a decision once they know the
\ncondition of the company and its concessionaires,\" he said.<\/p>\n
AOI is an integrated wood-based company which is supported by
\n849,100 hectares of forest concessions in Maluku and Irian Jaya,
\nas well as several other concessions under the Djajanti Group.<\/p>\n
The Djajanti Group is currently the holder of 26 forest
\nconcessions covering an area of 2.8 million hectares in
\nKalimantan, Maluku and Irian Jaya.<\/p>\n
A Djajanti subsidiary, PT Nusantara Plywood, which is based in
\nGresik, East Java, came under fire earlier this week when
\nDjamaludin accused it of illegal timber trading and smuggling.
\n(pwn)<\/p>",
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