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)