Govt to decide on Cemex case today

Govt to decide on Cemex case today

The Jakarta Post, Jakarta

The government will decide on Thursday to propose an option to
Mexico's cement giant Cemex SA in a bid to seek an out of court
settlement over a long-standing investment dispute, according to
a minister.

"There are 16 options. We will select one tomorrow,"
Coordinating Minister for the Economy Aburizal Bakrie told
reporters on Wednesday. He declined to give details.

The selected option would be used to negotiate with Cemex, he
said.

The government is under pressure to resolve its investment
dispute with Cemex, not only because the government may risk
paying huge financial penalties if an international arbitration
court ruled in favor of the foreign cement giant, but also
because a quick resolution to the high profile case would help
revive investor confidence in the country.

Cemex has launched a law suit against the government for
failing to execute a 1998 investment deal, under which the
company was entitled to eventually become a majority shareholder
in Indonesia's largest cement firm PT Semen Gresik after
acquiring a stake of more than 25 percent in the East Java-based
company six years ago.

The previous government has failed to resolve the case during
the past couple of years partly due to strong opposition from
people in West Sumatra, the home base of a subsidiary of Gresik,
for Cemex to become the majority owner of the state-owned firm.

But State Minister of State Enterprises Sugiharto said
earlier that the new government aimed to settle the dispute in 42
days.

According to sources at the ministry, some of the policy
options being considered by the government include an option for
the government to buy back Cemex's ownership in the publicly
listed Semen Gresik, spinning off the company's units before
allowing Cemex to control Gresik, and an option to allow Cemex to
set up new cement factories if it agrees to sell back its shares
in Gresik to the government.