Open bid planned for Krakatau's shares<\/p>\n
JAKARTA (JP): The government is to invite international
\nbidders to buy part of the country's largest steel producer, PT
\nKrakatau Steel, next week, State Minister of the Empowerment of
\nState Enterprises Tanri Abeng said yesterday.<\/p>\n
\"The competitive bidding process will be held next week after
\nwe appoint the investment advisor tomorrow (today),\" he told
\nreporters following a meeting with Coordinating Minister for
\nEconomy, Finance and Industry Ginandjar Kartasasmita.<\/p>\n
He said that the 10 foreign investment banks which would back
\nup the privatization of the country's 12 state-owned companies in
\nthe 1998\/1999 fiscal year would be announced today.<\/p>\n
The bidding process for Krakatau Steel would be handled by an
\nappointed investment bank which must have expertise in the steel
\nindustry, he said.<\/p>\n
He explained that after the investment bank selected the best
\ninvestor candidates for Krakatau Steel, a one-month due
\ndiligence period, which would include technical and economic
\nevaluations, would be conducted. The company's management would
\nbe involved in this process.<\/p>\n
After that, another one-week evaluation process would be
\nundertaken to come up with an economic-technical recommendation
\nwhich would be handed over to the country's privatization team.
\nThis is headed by Coordinating Minister for Development
\nSupervision and State Administrative Reforms Hartarto
\nSastrosoenarto.<\/p>\n
Together with the Minister of Finance, Tanri is a member of
\nthe privatization team.<\/p>\n
\"The final decision is in the hands of Coordinating Minister
\nHartarto,\" Tanri said, adding that Hartarto would consider all
\nissues, including the sociopolitical aspects of the deal.<\/p>\n
He promised that the stratified privatization process would be
\ndone in a transparent manner.<\/p>\n
Tanri was strongly criticized by Krakatau's management early
\nthis week about allegations that he had quietly made a deal with
\nthe Netherlands-based Ispat International to sell 49 percent of
\nKrakatau's shares for the relatively low price of US$400 million.<\/p>\n
The deal would have given Ispat a monopoly in the domestic
\nsteel wire and rod industry.<\/p>\n
Tanri denied the accusations, saying that it was not a final
\ndeal.<\/p>\n
He also said that the government would make sure the Krakatau
\nprivatization deal would not create a monopoly in the steel wire
\nand rod market.<\/p>\n
\"We will negotiate (with the potential investor),\" he said,
\npointing out that to prevent a monopoly the government may handle
\nthe marketing side.<\/p>\n
Tanri also said that the nation would gain by selling a larger
\nstake of Krakatau because it would get a better price.<\/p>\n
The 1998\/1999 privatization program is expected to raise a
\ntotal of Rp 15 trillion (US$1.3 billion), mainly to support the
\nstate budget which is heavily burdened by huge subsidy
\ncommitments caused by the economic crisis. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/open-bid-planned-for-krakataus-shares-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}