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)