Acquisitions need ministry's approval
JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo says the direct acquisition of an interest in a forest concessionaire may be made only with his prior approval.
"If an acquisition involves a forest concessionaire, it must be approved by the minister of forestry. But if it concerns a company's wood-based plant, for instance, it doesn't have to deal with my office," he said on Monday.
Djamaludin was commenting on the plans of PT Artika Optima Inti (AOI), a subsidiary of the Djajanti Group, to raise US$147 million from the sale of 31.86 percent of its shares to Kramat Tin Dredging Bhd. of Malaysia.
AOI's plywood subsidiary, whose plans to go public failed to gain a recommendation from the forestry ministry last year, is currently submitting a renewed proposal to the Capital Market Supervisory Agency that it be listed on the Jakarta Stock Exchange.
Kramat Tin announced last week that Malaysia's securities commission had already approved the company's acquisition plan.
According to a statement made available to The Jakarta Post on Monday, Kramat Tin, which is listed on the Kuala Lumpur Stock Exchange, intends to penetrate the Indonesian market through the acquisition.
Under the rules of the Malaysian securities commission, if the initial public offering price of AOI shares on the Jakarta exchange is less than M$3 per share, the owner of the Djajanti Group, Burhan Uray, must pay the difference to Kramat Tin.
Uray is also required to give a guarantee that the after-tax profit of AOI is not less than M$127,325,000 per annum and must pay any shortfall that arises to Kramat Tin, up to the equivalent of the equity interest of Kramat Tin in AOI.
The profit guarantee would be for a period of three financial years, starting from the year in which Kramat Tim's proposal is realized.
Halt
Plans of AOI's plywood subsidiary to go public ran aground last year when Djamaludin said that the company had failed to meet a number of requirements, among them the construction of a wood processing plant in Irian Jaya, where its concession is located, and the provision of details about the source of the raw material use by its plywood mill in Maluku.
Djamaludin refused to grant the company a recommendation to go public, notwithstanding that the firm had already received the go-ahead from the Capital Market Supervisory Agency.
Djamaludin acknowledged on Monday that a recommendation from his office was not a prerequisite for forest-related companies to go public.
"The only recommendation will be from the public. A transparent presentation by the company will allow the public to judge for themselves whether or not they are willing to buy the company's shares... They can make a decision once they know the condition of the company and its concessionaires," he said.
AOI is an integrated wood-based company which is supported by 849,100 hectares of forest concessions in Maluku and Irian Jaya, as well as several other concessions under the Djajanti Group.
The Djajanti Group is currently the holder of 26 forest concessions covering an area of 2.8 million hectares in Kalimantan, Maluku and Irian Jaya.
A Djajanti subsidiary, PT Nusantara Plywood, which is based in Gresik, East Java, came under fire earlier this week when Djamaludin accused it of illegal timber trading and smuggling. (pwn)