Semen Gresik to spin off Semen Padang<\/p>\n
JAKARTA (JP): State Minister of Investment and State
\nEnterprises Development Laksamana Sukardi said on Monday the
\ngovernment would spin off PT Semen Padang from state cement maker
\nPT Semen Gresik in a bid to smooth the plan by Mexico's Cemex SA
\nde CV to become the majority shareholder in the company.<\/p>\n
\"We will spin off Semen Padang,\" Laksamana told reporters on
\nthe sidelines of a business gathering.<\/p>\n
He declined to provide further details.<\/p>\n
Laksamana was responding to concerns that the plan by Cemex to
\nincrease its stake to become the majority shareholder in Semen
\nGresik would be rejected by the people of Padang in West Sumatra
\nprovince.<\/p>\n
The West Sumtara-based Semen Padang is wholly owned by Semen
\nGresik. An earlier attempt by Cemex to obtain a majority stake in
\nSemen Gresik failed following the West Sumatran people's
\nwidespread rejection of foreign control in Semen Padang.<\/p>\n
Local people have argued that Semen Padang's factory is built
\non their heritage land.<\/p>\n
Laksamana said on Friday the government had tentatively agreed
\nto a proposal by Cemex to increase its stake to become the
\nmajority shareholder in Semen Gresik, the country's largest
\ncement maker.<\/p>\n
Cemex currently owns 25.53 percent of the publicly listed
\ncement maker. The government owns 51 percent, and the public 23
\npercent.<\/p>\n
Separately, Semen Gresik president Urip Timuryono said on
\nMonday that the company had no objections to divesting its
\nownership in Semen Padang.<\/p>\n
\"It's very possible. We have no objection to the demand for
\nthe group to spin off Semen Padang,\" Urip said on the sidelines
\nof a meeting with the House of Representatives Commission V for
\ntrade and industry.<\/p>\n
Semen Gresik, based in East Java, acquired Semen Padang from
\nthe government in 1995 as part of the consolidation of state-
\nowned cement factories. The company also acquired another
\ngovernment-owned cement maker in South Sulawesi called PT Semen
\nTonasa.<\/p>\n
Urip said the value of Semen Padang must be determined by an
\nindependent appraisal before the sale process started.<\/p>\n
He said his office was currently in the process of talking
\nwith people from Semen Padang and the West Sumatran
\nadministration over the spin off plans.<\/p>\n
He stressed, however, that the spin off plans must be
\nconducted in a transparent manner.<\/p>\n
Timuryono declined to comment on Cemex's plans to become the
\nmajority shareholder in Semen Gresik, saying his office was still
\ntalking with its Mexican counterparts.<\/p>\n
Cemex, the world's third largest cement maker, bought a 14
\npercent stake in Semen Gresik in 1998 for US$1.38 per share, or
\n$114.6 million.<\/p>\n
The previous administration of president B.J. Habibie
\ninitially planned to sell 35 percent of the government's stake in
\nSemen Gresik as part of its privatization program to raise cash
\nto finance the state budget.<\/p>\n
Cemex won the first round of the bidding process for the
\ngovernment's 35 percent stake in July 1998.<\/p>\n
But the decision was met with protests by West Sumatrans as it
\nwould have given Cemex control over Semen Gresik as well as Semen
\nPadang. This forced the Habibie administration to divest only 14
\npercent of the government's stake.<\/p>\n
Cemex now owns a 25.53 percent stake in Semen Gresik after
\nincreasing its investment in the company by buying additional
\nshares on the open market.<\/p>\n
Laksamana is now under pressure to raise some Rp 6.5 trillion
\nfrom the government's privatization program this year to help
\nfinance the April-December 2000 state budget.<\/p>\n
The privatization revenue target was initially set at Rp 5.9
\ntrillion, but legislators forced the government to raise the
\ntarget in order to fund a larger increase in the salaries of
\ngovernment employees.<\/p>\n
The further divestment of Semen Gresik would help raise the
\nprivatization proceeds target.<\/p>\n
The government plans to divest between 20 percent and 49
\npercent of its stake in eight state companies. These companies
\nare fertilizer firm PT Pupuk Kaltim, airport operator PT Angkasa
\nPura II, coal mining company PT Bukit Asam Batubara, plantation
\nfirms PT Perkebunan Nusantara III and PT Perkebunan Nusantara IV,
\npharmaceutical manufacturers PT Indo Farma and PT Kimia Farma,
\nand publicly listed mining firm PT Aneka Tambang.<\/p>\n
Separately, Riza Primadi, public relations chief at
\nLaksamana's office, said on Monday that Pupuk Kaltim would be the
\nfirst company to go on sale through an initial public offering
\n(IPO) on both the domestic and the overseas market.<\/p>\n
He said that the IPO was expected to be completed either in
\nApril or May.(rei\/cst)<\/p>",
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