Govt bows to pressure on Gresik privatization

Govt bows to pressure on Gresik privatization

JAKARTA (JP): The government, caving in to the public outcry
which greeted an earlier plan, will divest just 14 percent of its
65 percent stake in publicly listed PT Semen Gresik, a minister
said yesterday.

Coordinating Minister for Development Supervision and State
Administrative Reforms Hartarto Sastrosoenarto said the modified
privatization scheme would retain government control of 51
percent in the country's largest cement maker.

"The new formula is being discussed with the prospective
foreign strategic partners," he told media representatives
outside his office.

The State Minister of the Empowerment of State Enterprises
Tanri Abeng could not be reached for comment.

Mexico's Cemex SA de CV won the first bid for 35 percent of
Semen Gresik last month by offering US$287 million.

Germany's Heilderberger Zement AG, Switzerland's Holderbank,
and France's Laferge Asia Pacific planned to top Cemex's offer
through a second bidding process, which was initially scheduled
for Aug. 19.

But Tanri's deputy Sofyan Djalil announced Tuesday that
bidding would only resume after a new privatization formula had
been agreed with the prospective investors.

The postponement followed objections from West Sumatrans --
owners by traditional law of the land where a Semen Gresik plant
is located -- against the plan allowing the winning strategic
partner to hold a majority control.

Under the former plan, the winning bidder would have been
allowed to purchase another 16 percent stake in the cement
company through a tender offer mechanism on the local stock
exchange.

West Sumatrans staged a demonstration against the plan because
it would allow foreigners to control PT Semen Padang, a wholly
owned subsidiary of Semen Gresik.

Semen Gresik is one of the 12 state-owned companies prepared
for privatization this fiscal year to raise a total of $1.5
billion to help the current budget in financing the various
subsidy commitments which amount to 8.5 percent of gross domestic
product. (rei)