AOI negotiating with Ministry of Forestry on share issuance plan
AOI negotiating with Ministry of Forestry on share issuance plan
JAKARTA (JP): PT Artika Optima Inti (AOI), a wood-based
company affiliated to the Djajanti Group, is still negotiating
with the Ministry of Forestry, which has refused to recommend its
plan to sell shares to public through the capital market.
AOI's corporate secretary, Theo Lekatompessy, told The Jakarta
Post here Saturday that his company is trying to persuade the
ministry to support its plan to sell 66 million new shares or 30
percent of its enlarged shares to public.
The share sales, which were originally planned last month,
have been delayed due to the ministry's refusal to give its
recommendation. The shares were to be sold to raise US$210
million to finance the acquisition of a 70-percent stake in PT
Maluku Dinamika Semen, a cement producer in Ambon, and to pay
debts, as well as to increase capital and to purchase new plant
equipment.
AOI, a wood-based panel board manufacturer on Seram Island,
Maluku, has made presentations in Indonesia and other countries
on its plan to sell the new shares. It has made presentations in
Singapore, Hong Kong, Tokyo, New York, San Francisco, London,
Paris, Zurich, Rotterdam and Geneva, besides in Jakarta and
Surabaya.
"Our board of directors has decided to keep a low profile
approach when dealing with this issue," Lekatompessy said.
He declined to give further details on the development of the
on-going discussions.
Obligations
Minister of Forestry Djamaloedin Soeryohadikoesoemo turned
down the plan at the end of April, saying that AOI had failed to
fulfill its forest concession obligations in Irian Jaya.
Under the Indonesian law, a concessionaire must not only
exploit forests in a sustainable way to guarantee preservation
but also must build a wood processing factory in the area to spur
local economic and industrial development.
Djamaloedin said that a recommendation for going public will
be given to a timber firm as soon as it can prove that it has
fulfilled all of the requirements on sustainable management.
The coordinator of the Indonesia Non-Governmental Organization
Network for Forest Conservation (Skephi), S. Indro Tjahjono,
hailed Djamaloedin for his refusal to provide a recommendation
for AOI.
"That's a correct decision," Indro said on Saturday, adding
that international non-governmental organizations are prepared to
boycott AOI if it proceeds with its plan to go public.
According to Indro, international organizations, such as the
World Rainforest Movement, the Forest Monitor, the European
Alliance with the Indigenous People, Rettet den Regenwald and
Robinwood, had launched campaigns in the past against the sales
of the shares of PT Barito Pacific Timber and its subsidiary PT
Sumalindo Lestari Jaya. Despite this, the two firms were
successful in attracting investors to their shares, which were
oversubscribed.
Djajanti Group, established by Burhan Uray and his family in
1956 in Banjarmasin, East Kalimantan, is one of the leading
conglomerates in Indonesia.
According to Lekatompessy, Djajanti Group currently holds
total assets of US$530 million and has annual sales exceeding
$370 million.
Frans Hendra Winarta, a senior partner of the Frans Hendra
Winarta & Partners law firm, doubted whether only technical
reasons have led to this sudden termination.
"Something must be behind it," Frans said on Saturday, adding
that Djajanti Group might have taken on an unfavorable image in
the eyes of some powerful parties.
In his analysis, fierce competition is shoving the Djajanti
Group off of the economic battle ground.
In Indonesia, the Djajanti Group has two plywood factories,
each on Seram Island and in Gresik, East Java, with a total
production capacity of 312,000 cubic meters per annum. It has 26
concessions with over 3.5 million hectares of forests in
Kalimantan, Irian Jaya, Maluku, Sumatra and Sulawesi.
Indro said the Capital Market Supervisory Agency (Bapepam)
should evaluate the procedures for share listing. It should not
only measure the financial and production aspects of the share
issuer but also the ways in which it gets its raw materials. (09)