Krakatau Steel delays privatization schedule<\/p>\n
JAKARTA (JP): The state-owned steel manufacturer PT Krakatau
\nSteel announced on Monday that plans for its privatization have
\nbeen delayed until the year 2000 due to weak international steel
\nprices.<\/p>\n
Company president Sutrisno said international steel prices had
\nplunged to a record low of US$200 per ton from between $310-$370
\nper ton early last year due to weak demand in the wake of
\ndeclining global economic growth.<\/p>\n
\"We will sell the shares when steel prices are strong,\" he
\ntold reporters at a breakfast gathering.<\/p>\n
He said steel prices had now bottomed out and were expected to
\nincrease in the middle of next year.<\/p>\n
Krakatau Steel was among 12 state-owned companies which were
\nto have been privatized in the current fiscal year.<\/p>\n
A sluggish capital market has forced the government to cut
\nprivatizations in the 1998\/1999 fiscal year to 10 companies.<\/p>\n
In addition to Krakatau Steel, the government has also
\npostponed plans to privatize domestic telecommunications provider
\nPT Telkom.<\/p>\n
State Minister of the Empowerment of State Enterprises Tanri
\nAbeng was lambasted by the press in June when he quietly drafted
\na memorandum of understanding (MOU) promising to sell 49 percent
\nof Krakatau Steel to the Dutch company Ispat International for
\nthe relatively cheap price of $400 million.<\/p>\n
Tanri claimed that no underhand deals were involved and said
\nthe memorandum was the initial step in an otherwise transparent
\nprivatization process.<\/p>\n
Sutrisno explained that Krakatau Steel has been increasing its
\nexports to Europe and the United States since early this year due
\nto sluggish domestic demand.<\/p>\n
He added that the company would try to maintain its
\ntraditional Southeast Asian export market, despite the economic
\ncrisis that has plagued the region since the middle of last year.<\/p>\n
Krakatau Steel, with an annual production of three million
\ntons, exported a total of 100,000 tons of steel to Europe and
\n70,000 tons to the U.S. in the first half of this year, he said.<\/p>\n
He also said the company booked a gross profit of Rp 400
\nbillion ($53.3 million) in the first half of this year.<\/p>\n
Pre-marketing<\/p>\n
Separately, Sofyan Djalil, deputy for communications at the
\noffice of the State Minister of the Empowerment of State
\nEnterprises, said that pre-marketing of state-owned tin mining
\ncompany PT Tambang Timah, gold and nickel mining company PT Aneka
\nTambang and plantation company PT Perkebunan IV would start early
\nnext month.<\/p>\n
He said detailed information about the three companies,
\nincluding the size of stake available to strategic investors is
\nbeing prepared by the government's financial advisors and should
\nbe complete by the end of this month.<\/p>\n
Morgan Stanley and Paribas have been appointed as the
\nfinancial advisors for Tambang Timah and Aneka Tambang, and
\nJardine Fleming is looking after the affairs of Perkebunan IV.<\/p>\n
\"Investors interested in the companies can make their bidding
\nprices based on the information we are preparing,\" Sofyan told
\nreporters on the sidelines of a seminar on Monday.<\/p>\n
Pre-marketing of the three state firms will follow a similar
\nprocess begun late last month for the state-owned international
\ncall operator PT Indosat.<\/p>\n
PT Indosat will become the second state firm to be privatized
\nthis fiscal year after state-owned cement maker PT Semen Gresik,
\nin which a 14 percent stake was sold to Mexico's Cemex SA de CV
\nlate last month. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/krakatau-steel-delays-privatization-schedule-1447893297",
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