Govt tries to stop Cemex exit<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government said it will try to prevent Mexican-based
\ncement giant Cemex SA from leaving the country by offering a
\nsettlement to resolve a protracted dispute over the company's
\ninvestment in this country.<\/p>\n
"I cannot reveal what option the government will take now,
\nbecause it is confidential. For sure, we will try to offer Cemex
\na lucrative solution, so that they don't leave the country,"
\nState Minister of State Enterprises Laksamana Sukardi said on
\nWednesday.<\/p>\n
Rumors are circulating that Cemex may leave the country after
\nfacing difficulties in carrying out its investment plans.<\/p>\n
Laksamana, speaking after a hearing with the House of
\nRepresentatives Commission IX for finance, said the country's
\nimage would be tarnished if Cemex decided to pull out.<\/p>\n
He added that the government was now in the process of
\npreparing a team of legal advisors to handle the arbitration case
\nat Washington-based International Center for Settlement of
\nInvestment Disputes (ICSID), while investigating options for an
\nout-of-court settlement.<\/p>\n
The dispute between the government and Cemex centers on its
\nbeing unable to acquire a controlling stake in state-owned PT
\nSemen Gresik, Indonesia's third largest cement maker.<\/p>\n
Cemex acquired a 25.50 percent stake in Gresik in late 1998,
\nwhen the government agreed to provide Cemex with an option to
\nincrease its ownership to a maximum 51 percent by 2001.<\/p>\n
But efforts by Cemex to acquire a majority stake in Gresik
\ncould not be realized due to strong opposition from Gresik's West
\nSumatra-based subsidiary PT Semen Padang and provincial
\nadministration, and the government has thus retained its 51
\npercent stake in publicly listed Gresik.<\/p>\n
After years of trying unsuccessfully to resolve the dispute,
\nCemex filed a litigation against the government with ICSID late
\nlast year.<\/p>\n
Under ICSID rules, the losing party, besides paying an award
\nto the winner as determined by the tribunal, must reimburse all
\narbitration costs borne by the winning party.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-tries-to-stop-cemex-exit-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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