Govt sells 3.9% stake in Indocement for Rp 352b

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.