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)