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)