Gresik privatization deadline extended

Gresik privatization deadline extended

JAKARTA (JP): Today's deadline for the second round of bidding
for the government's stake in publicly listed Semen Gresik has
been extended, a senior official said yesterday.

Sofyan Djalil, a deputy state minister of the empowerment of
state enterprises, said that the earlier divestment formula which
would allow foreign companies to become a majority shareholder in
the cement company had to be modified to satisfy the public.

He said a new deadline could not be set yet because the first
formula had to be revised following strong objections from the
public to foreign control of Semen Gresik.

"We have to renegotiate the changes with the foreign bidders,
especially Cemex which has already won the first bid," he told
The Jakarta Post yesterday.

Mexico's Cemex SA de CV won the first bid last month by
offering US$287 million for a 35 percent stake in Semen Gresik.

Germany's Heilderberger Zement AG, Switzerland's Holderbank,
and France's Laferge Asia Pacific plan to top Cemex's offer in
the second round of bidding, the deadline for which was initially
scheduled for today.

Cemex, however, will have the opportunity to top any new bid
within five days.

The winning strategic investor has the right to purchase
another 16 percent stake in Semen Gresik through a tender offer
mechanism in the local stock market to become the majority
stockholder.

This formula, however, was strongly objected to by the people
of the West Sumatra. They demanded that Semen Gresik's wholly
owned subsidiary, PT Semen Padang, must be dropped from the
privatization scheme if the government proceeds with the plan.

The West Sumatran people control the land where Semen Padang's
facilities are located.

Semen Gresik is the first state-owned company to be put up for
sale in the current fiscal year ending March 1999. A total of 12
state-owned companies are being prepared for privatization to
raise a total of $1.5 billion to help finance the state budget
which is heavily burdened by huge subsidy commitments to help the
poor survive the country's worst economic crisis in three
decades. (rei)