Acquisitions need ministry's approval

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)