Tue, 21 Nov 2000

Four state firms to be privatized in 2001: Prijadi

JAKARTA (JP): Four state-owned enterprises are ready to be privatized next year in a bid to raise around Rp 5 trillion (US$537.63 million) in proceeds, finance minister Prijadi Praptosuhardjo said on Monday.

The four state-owned companies includes superintending firm PT Sucofindo, airport operator PT Angkasa Pura II, and pharmaceutical firms PT Kimia Farma and PT Indofarma, Priyadi told a hearing session with the House of Representatives Commission IX for financial and development planning affairs.

Prijadi said the government considered, in designing the privatization program, the financial soundness of the company, the investor interest and uncontrollable factors such as political, security and macro economic conditions.

Sucofindo is known for its services in export inspection, certification and commodity inspection, and trade facilities. Angkasa Pura II operates the Soekarno Hatta International Airport in Jakarta, while Kimia Farma and Indofarma manufactures various over the counter drugs.

The four companies were among the eight to ten enterprises initially prepared for privatization this year in a bid to raise Rp 6.5 trillion in proceeds but the government failed to realize the plan due to various problems including unfavorable market and political conditions.

Prijadi said the privatization program would help plug the 2001 state budget deficit projected to reach Rp 52.11 trillion or 3.7 percent of the gross domestic product (GDP).

He said the remaining source of funds for the plugging of the budget deficit would come from the Indonesian Bank Restructuring Agency (IBRA), which would contribute around Rp 27 trillion from its asset disposal, and overseas loans.

The Consultative Group on Indonesia (CGI), the grouping of the country's traditional lenders, recently pledged to provide some $4.77 billion in loan next year.

Prijadi said the breakdown of IBRA proceeds included Rp 8.92 trillion from the sale of restructured bank loans, Rp 2.23 trillion cash revenue from the restructuring of bank nonperforming loans, Rp 2 trillion from the sale of noncore assets, Rp 8.5 trillion from the sale of ownership in various companies and 3.6 trillion from the divestment of ownership in banks.

Prijadi also said that out of the country's 158 state enterprises, 132 were expected to generate profits next year, while the others would still be operating at a loss.

He did not list the name of the companies but he said the profitable companies were projected to contribute a combined Rp 8 trillion in cash to help finance the state budget.

He also said the dividend pay out ratio of the healthy companies in 2001 was projected to be around 50 percent of the net profit.

He said some companies, particularly those who were investing or paying debts might only be able to have a dividend pay out ratio of less that 50 percent. (rei)