Govt sells 13% stake in Indocement at Rp 824b

Govt sells 13% stake in Indocement at Rp 824b

Rendi A. Witular, The Jakarta Post, Jakarta

The government has sold its remaining 13 percent stake in the
country's second largest cement maker, PT Indocement Tunggal
Prakarsa, to the public for Rp 824 billion (US$98 million).

In a press statement on Thursday, the Office of the State
Minister for State Enterprises said the 477 million shares,
equivalent to 13 percent of the firm's entire shares, were sold
for Rp 1,725 per share on Thursday.

The price was 4.2 percent lower than Indocement's closing
price on Wednesday at Rp 1,800 per share.

Deputy minister for privatization at the Office of the State
Minister for State Enterprises, Mahmuddin Yasin, said that by the
end of this month the government would have raised about Rp 1.17
trillion from the sale of its share of Indocement.

"The government will raise total proceeds of approximately Rp
1.77 trillion from the divestment of Indocement .... We have
completed our full exit from the company," said Mahmuddin in a
statement.

Proceeds from the stake sales will be used to trim the budget
deficit this year, which is an estimated Rp 34.4 trillion.

The sale on Thursday was executed through an accelerated
overnight bookbuilding and was completed in 14 hours, with total
demand of about 1.3 billion shares or almost three times larger
than the amount of offered shares.

Previously, the government had a total 16.9 percent ownership
in Indocement, which it received as compensation for the debts
owed by the Salim group, the former owner of the company, to
state banks.

On Wednesday, the government sold a 3.9 percent stake in
Indocement to German-based cement producer HeidelbergCement AG at
Rp 2,462 per share, raising about Rp 352 billion.

With the purchase, Heidelberg, Germany's biggest cement maker,
became the majority shareholder of Indocement with a 65.12
percent stake. The remaining 13.5 percent is owned by PT Mekar
Perkasa, 1.9 percent by Marubeni Corporation and 19.5 percent by
the public.

Currently, Indocement operates nine cement plants in
Citeureup, Bogor, two in Cirebon, West Java, and one in South
Kalimantan, with a total production capacity of about 15.5
million tons per year.

Indocement is the ninth-best performer on the Jakarta stock
exchange since the start of this year, with a 167 percent surge
in its share prices.

Indocement sales revenue in the first nine months of this year
declined to Rp 712 billion from Rp 952 billion in the same period
last year on the back of lower foreign exchange gains.

However, the company recorded a 5 percent increase in net
profit to Rp 3.16 billion, due mostly to a changed product
pricing strategy.

The bourse suspended trading in Indocement shares on early
Thursday, pending clarification of the government's divestment
plan for the company.