Govt to get $287m from Gresik divestment<\/p>\n
JAKARTA (JP): The government is likely to receive more than
\nUS$287 million in cash next month from the sale of 35 percent of
\nstate-owned PT Semen Gresik.<\/p>\n
The price bids from three new bidders, Germany's Heilderberger
\nZement AG, Switzerland's Holderbank and Laferge Asia Pacific of
\nFrance, are certain to top the $287 million offered by Mexico's
\nCemex SA de CV in the first bidding stage, according to the a
\ndeputy of the state minister for the empowerment of state
\nenterprises, Sofyan Djalil.<\/p>\n
He said the government's divestment proceeds would also likely
\nbe received sooner than expected since the new bidders might
\nsubmit their proposals before the August 19 deadline for the
\nsecond bidding stage.<\/p>\n
"The three contenders have said they will submit their
\nproposals and they may even deliver the proposals before August
\n19," he said yesterday following a seminar on the country's
\nprivatization program.<\/p>\n
Cemex SA de CV won the first bidding stage to purchase more
\nthan half of the government's 65 percent stake in Gresik by
\noffering $287 million or $1.38 per share, beating Germany's
\nHeilderberger Zement AG and Switzerland's Holderbank in the
\nprocess.<\/p>\n
"Cemex is now the preferred winner, meaning that the bidders
\nin the second stage have to offer a higher price to beat Cemex,"
\nSofyan said.<\/p>\n
Heilderberger and Holderbank, in addition to Laferge, will try
\ntheir luck again in the second bidding.<\/p>\n
Sofyan added, however, that Cemex would be given the
\nopportunity to increase its offer to top any new bids within five
\ndays after the completion of the second stage.<\/p>\n
The winner of the Gresik privatization deal will be given the
\nopportunity to increase its stake to more than 50 percent through
\na tender offer on the local bourse, he said.<\/p>\n
Gresik is the first state-owned company to be privatized in
\nthe 1998\/1999 fiscal year ending in March. The privatization
\neffort is expected to raise Rp 15 trillion ($1.5 billion at an
\nexchange rate of Rp 10,000 per dollar) to help finance the state
\nbudget, which is currently heavily burdened by huge subsidy
\ncommitments to help the poor survive the economic crisis.<\/p>\n
Sofyan said 12 state-owned companies were ready to be
\nprivatized, but that the government might only privatize two or
\nthree companies if it was enough to meet the $1.5 billion target.<\/p>\n
"The target in the current fiscal year is $1.5 billion, which
\nmay come from the sale of two or three companies."<\/p>\n
When asked to confirm rumors that publicly listed mining
\noperation PT Aneka Tambang (Antam) would be the next to be
\nprivatized, he said: "It's not yet a certainty. The criteria is
\nthe readiness of the company."<\/p>\n
He explained that although 12 companies were ready for sale,
\nthere were still various problems to be settled first.<\/p>\n
He pointed out that domestic telecommunications operator PT
\nTelkom, for instance, had yet to settle problems in its joint
\noperation projects (KSO) with five international
\ntelecommunications giants before being further divested.<\/p>\n
"The KSOs will be restructured," he said, pointing out that
\none of the difficulties was the inability of the five
\ninternational telecommunications giants to deliver a targeted 2
\nmillion fixed lines due to the country's year-long economic
\ncrisis.<\/p>\n
He said the government had yet to decide on a strategy on
\nAntam to achieve the best value in privatizing the mining
\ncompany.<\/p>\n
One consideration being studied is to merge Antam with two
\nother mining companies, PT Tambang Timah and PT Bukit Asam
\nBatubara, before proceeding with the privatization, he said.<\/p>\n
Criticism<\/p>\n
The country's privatization program has received widespread
\ncriticism, causing a delay in obtaining proceeds from sales.
\nAccording to Director General of the State Budget Darsyah, part
\nof the $1.5 billion should have already been received by June.<\/p>\n
The latest criticism came from the head of the Development
\nFinance Comptroller (BPKP), Soedarjono, yesterday when he called
\non the government to cancel its plans to sell state-owned
\ncompanies. He argued that foreign majority ownership would
\nthreaten national interests.<\/p>\n
"I think the government is being too hasty in implementing the
\nprivatization program without first making a clear concept about
\nthe program and the strategic role of the state companies in the
\ncountry's politics," he said.<\/p>\n
He pointed out that when the country faced a severe shortage
\nof cement three years ago, there was nothing the government could
\ndo despite its 65 percent control in Gresik, the country's
\nlargest cement maker.<\/p>\n
"What will happen if foreigners control Gresik?," he asked.<\/p>\n
He also pointed out that the past policy of having the private
\nsector control the cooking oil industry was badly affecting the
\ncountry now.<\/p>\n
"None of the private companies are now willingly to end the
\ncurrent cooking oil crisis," he said.<\/p>\n
"As the man most responsible for auditing state companies, I
\nhave not seen any clear concept in the privatization program,"
\nSoedarjono said.<\/p>\n
He stressed that raising money to finance the budget could
\nalso come from other sources.<\/p>\n
"Based on my experience, I believe that a larger tax revenue
\ncan be obtained," he said, declining to give any figure. (rei)<\/p>",
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