Spin-off plan won't affect bond issue: Gresik executive<\/p>\n
JAKARTA (JP): State cement producer PT Semen Gresik said on
\nWednesday that the government's plan to spin off the company's
\ntwo subsidiaries would not effect its plan to issue bonds in July
\nthis year.<\/p>\n
"The spin-off and the bond issue are two separate things," the
\ncompany's head of finance and accounting Bambang Sulawidjaja told
\na media briefing.<\/p>\n
He explained that Semen Gresik's financial resources would be
\nstrong enough to pay back the bonds even if its two subsidiaries
\n-- PT Semen Padang and PT Semen Tonasa -- were hived off.<\/p>\n
According to Bambang, the two companies only contributed about
\none-third of Semen Gresik's total revenues. "We are big enough to
\nfulfill our commitments to our bond holders," he said.<\/p>\n
He said the Rp 1.2 trillion bond issue with a maturity period
\nof five years, would be used to repay part of Semen Gresik's
\nmedium-term notes.<\/p>\n
The company's medium-term notes totaled Rp 1.75 trillion
\n(based on an exchange rate of Rp 9,500 per dollar). This figure
\ncomprised US$162.21 million in U.S. dollar denominated notes,
\nwhich would mature in January next year, and Rp 214.6 billion
\nnotes which would mature in April 2002.<\/p>\n
The rest of the debt would be paid using the company's own
\nfunds, he said.<\/p>\n
Semen Gresik's bond-issue team head Amat Oemar Asnar said the
\ncompany would register the bond issue plan with the Capital
\nMarkets Supervisory Agency (Bapepam) on May 10. "We hope we will
\nbe able to launch the bond offering in July," he added.<\/p>\n
Bambang also said that the underwriters had made a "full
\ncommitment" to the bond issue, meaning the underwriters would buy
\nall the bonds not taken up by investors. The underwriters
\nincluded PT Danareksa Securities, PT Bahana Securities and PT
\nCiticorp Securities Indonesia.<\/p>\n
The government has agreed to spin off the two subsidiaries of
\nSemen Gresik due to pressure from local communities near the
\nSemen Padang plant in West Sumatra and the Semen Tonasa plant in
\nSouth Sulawesi.<\/p>\n
The local residents demanded the separation of Semen Padang
\nand Semen Tonasa after Mexico-based cement producer Cemex bought
\npart of the government's stake in Semen Gresik.<\/p>\n
Semen Gresik, which was merged with Semen Padang and Semen
\nTonasa in 1995 as part of a consolidation of state-owned
\ncompanies, is 25.53 percent owned by a subsidiary of the Mexican
\ncompany, PT Cemex Indonesia.<\/p>\n
The spin-off plan has been widely criticized. Observers said
\nthat the measure would be a setback to the government's plan to
\nincrease greater investor ownership of state enterprises, and
\nwould greatly damage foreign investors' trust.<\/p>\n
Bambang said there were many considerations to be examined
\nbefore separating the three companies, not least the settlement
\nof Semen Padang's debts to its holding company, Semen Gresik.<\/p>\n
Semen Gresik gave its corporate guarantee, along with Export
\nCredit Agencies (ECA) from Germany, France, and Denmark, for
\nSemen Padang's $74.5 million debt to ABN Amro bank to finance its
\nIndarung V project, he said<\/p>\n
As of 2000, Semen Padang's debt to ABN Amro totaled $64.6
\nmillion.<\/p>\n
"If the spin-off takes place, then somebody would have to
\nreplace Semen Gresik as Semen Padang's guarantor, and I don't
\nthink the government would be willing to do that," he said. (tnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/spin-off-plan-wont-affect-bond-issue-gresik-executive-1447893297",
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