Grosbeak pays $215m for Pelindo stake

Grosbeak pays $215m for Pelindo stake

JAKARTA (JP): The government has sold 51 percent of newly
established container port operator PT Jakarta International
Container Terminal (JICT) to Grosbeak Pte Ltd, a unit of Hong
Kong's Hutchison Whampoa, for US$215 million in cash.

The government announced on Wednesday that it would grant
Grosbeak a 20-year concession period to operate two container
terminals at Tanjung Priok Port, the country's largest and
busiest seaport.

It stated it would retain a golden share in JICT, with veto
rights on particularly important corporate matters.

"This is a significant and positive development in Indonesia's
continuing privatization process," State Minister of the
Empowerment of State Enterprises Tanri Abeng said.

Under the agreement, Grosbeak is required to make a noncash
contribution of container terminal operation software and
technical start-up support for JICT valued at approximately $28
million.

During the concession period, JICT will invest approximately
$340 million for the optimization of existing capacity and the
construction and development of additional berth and container
yards, the government said.

JICT is also expected to construct an additional 1.5 million
20-foot equivalent units (TEUs) of capacity at Tanjung Priok over
the next five years. It will make it one of the largest container
port destinations in the world, with total capacity of 3.1
million TEUs.

"We are pleased that the world's premier container port
operator is willing to commit such substantial financial and
management resources for the development of Indonesia's port
infrastructure, as this reflects the investor's confidence in the
potential of Indonesia," Tanri said.

The government said Grosbeak was selected as the preferred
partner after a competitive bidding process involving six well-
known international port operating and shipping companies.

Grosbeak is a 100 percent subsidiary of Hutchison Port
Holdings, the largest independent container port operator in the
world with interest in 17 ports throughout Asia, Europe and the
Americas. It accounts for approximately 10 percent of global
container traffic.

Hutchison Port Holdings is a subsidiary of Hong Kong
conglomerate Hutchison Whampoa.

"This is a tremendous opportunity for us to participate in the
future growth of the Indonesian economy," said John Meredith,
group managing director of Hutchison Port Holdings.

After the concession period expires, full control of JICT will
revert to its parent company, state-owned port operator PT
Pelabuhan Indonesia (Pelindo) II, the government said.

Sales of Pelindo II's stake in JICT marked the second
privatization of state firms in the 1998/1999 fiscal year ending
on March 31.

With JICT's sale, the government has collected about $395
million in privatization proceeds, less than half of the targeted
amount of $1 billion to help finance the state budget deficit.

The government earlier raised about $121 million from the 14
percent sale of publicly listed cement maker PT Semen Gresik to
Mexico's Cemex SA de CV. It also gained $59 million from
divestment in privately run instant noodlemaker PT Indofood
Sukses Makmur.

Tanri acknowledged that another three key sales slated for the
1998/1999 fiscal year would have to be carried over to the
1999/2999 fiscal year, beginning on Thursday. (rei)