Semen Gresik sale deadline expires without deal<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
The government once again missed the deadline to sell a 51
\npercent stake in cement maker PT Semen Gresik to Mexico's Cemex
\nSA de CV, as a Friday deadline for the sale expired without a
\ndeal.<\/p>\n
With the passing of the deadline, Semen Gresik employees
\ndropped plans for a strike, which would have begun today if the
\ngovernment had decided to sell Semen Gresik.<\/p>\n
\"In light of the Government of Indonesia's decision to
\npostpone the privatization of PT Semen Gresik until next year,
\nCemex believes there is a very strong likelihood that the
\ngovernment will not exercise the put option that expires today,\"
\nCemex said in a statement issued on Friday.<\/p>\n
Signs of the deal falling through completely, surfaced last
\nmonth after the government offered Cemex a complex new deal which
\nwas rejected by the subsidiaries and was, at the very least, not
\nwell-received by Cemex.<\/p>\n
Under a 1998 put option deal with Cemex, the government had
\nbeen given the right to sell its 51 percent stake in Semen Gresik
\nto Cemex for about $520 million.<\/p>\n
It would have allowed Cemex to gain control over Semen Gresik
\nand its two subsidiary units, PT Semen Padang in West Sumatra and
\nPT Semen Tonasa in South Sulawesi.<\/p>\n
But the plan has been met by protests allegedly organized by
\nlocal politicians in Sumatra and Sulawesi, to reject foreign
\ncontrol over Semen Gresik's units.<\/p>\n
They demand that Semen Padang and Semen Tonasa become
\nindependent of Semen Gresik and kept under government control.<\/p>\n
In a sign of support, employees at the three cement companies
\nthreatened to strike if the government went ahead with the
\nplanned sale of Semen Gresik.<\/p>\n
\"Because the deadline has passed and nothing happened, there
\nwill not be a strike,\" a Semen Padang official, who refused to be
\nnamed, told The Jakarta Post.<\/p>\n
According to him, some 3,500 Semen Padang employees were ready
\nto strike. If that were to happen the company would lose a daily
\noutput of around 17,500 metric tons of cement, he estimated.<\/p>\n
Cemex said that despite the fact that the deal has fallen
\nthrough once again, it would still maintain its current stake of
\n25.5 percent in Semen Gresik.<\/p>\n
Based on the original put option deal, Cemex would have gained
\na 76.5 percent stake in Semen Gresik which would include Semen
\nPadang and Semen Tonasa. Individual public investors currently
\nown the remaining 23.5 percent, and that would remain unchanged
\nregardless of the Cemex deal.<\/p>\n
To appease the people who are opposed to the sale, the
\ngovernment had offered Cemex a new deal last month.<\/p>\n
Under that one Cemex would still own a 76.5 percent in Semen
\nGresik, but only a minority stake in Semen Padang and Tonasa.<\/p>\n
Government officials said that they were in talks with Cemex
\nover the latest proposed deal.<\/p>\n
But it remains unclear whether the offer was a modification of
\nthe 1998 put option deal that had just expired, or built upon an
\nentirely new deal.<\/p>\n
Cemex officials were not available to comment on their press
\nstatement.<\/p>",
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