Govt sells 3.9% stake in Indocement for Rp 352b

Rendi A. Witular, The Jakarta Post, Jakarta

The government has sold a 3.9 percent stake in the country's second largest cement producer, PT Indocement Tunggal Prakarsa, to German-based cement giant Heidelberg Zement AG for Rp 352 billion (about US$42 million).

In a press statement on Wednesday, Mahmuddin Yasin, deputy minister for privatization at the Office of the State Minister for State Enterprises, said the sale was part of the government's plan to divest all of its minority shares in private firms.

"The sale is part of the government's continuing commitment to privatization, and more specifically to the divestment of its minority shareholdings in private companies," he said.

Under the agreement made with Heidelberg, the government has the right to sell 143 million shares, equivalent to 3.9 percent of the firm's entire shares, at a price 36.8 percent higher than the shares' value on the stock market.

Heidelberg purchased the government's stake at Rp 2,462 per share. The price of Indocement shares ended lower by Rp 50 at Rp 1,800 on Wednesday.

With the purchase, Heidelberg now holds a 65.12 percent stake in Indocement, while the government has reduced its stake to 13 percent.

The president and chief operating officer of Heidelberg Asia, Thierry Dosogne, said the company had received a notice from the Indonesian government stating its intention to exercise its right to sell its stake, and the company was willing to honor its obligation to buy the shares.

"We intend to honor our obligation to the (Indonesian) government and expect the shares to be crossed on the stock market on Oct. 30," he said in a statement.

The government is scheduled to sell the remaining 13 percent stake later this month via the stock market.

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

Elsewhere, the secretary of the Office of the State Minister for State Enterprises, Bacelius Ruru, told The Jakarta Post the government hoped to net at least Rp 1 trillion from the sale of its minority ownership in Indocement.

He said the 13 percent stake the government planned to sell to the public later this month was still in the process of bookbuilding to determine the maximum price.

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

Indocement posted a 78 percent decline in currency earnings to Rp 190 billion from Rp 870 billion.

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 company also lowered its interest expenses to Rp 275 billion from Rp 184 billion.