Heidelberger to become Indocement's majority owner

JAKARTA (JP): Shareholders of publicly listed cement company PT Indocement Tunggal Prakarsa agreed on Thursday to a rights issue to allow German cement producer Heidelberger Zement AG to become the majority owner of Indocement.

Under the right issue plan, Heidelberger will exercise the right of two of Indocement's shareholders, PT Mekar Perkasa and PT Kaolin Indah Utama, to buy new shares in the cement company.

Both shareholders, with a combined stake of some 45 percent, will transfer their rights to Heidelberger after the German company absorbs $150 million worth of Indocement's debts.

Under Indocement's one-to-one rights issue, a shareholder is allowed to buy a new share for every old share held at a price of Rp 1,200 (about 12 U.S. cents).

"Based on the current number of the company's total shares, the number of shares that will be issued is up to 1.895 billion with a nominal value of Rp 500 per share," Indocement said in a statement.

"After Heidelberger exercises such a right, it will also purchase a major part of the company's (Indocement) old shares currently held by Mekar and Kaolin," the company added.

It did not say for how much Heidelberger would purchase Mekar's and Kaolin's shares.

But according to a Indocement official, Heidelberger may spend another $220 million for the share purchase, and for buying the rights of the government and the public in the rights issue.

The government through the Indonesian Bank Restructuring Agency (IBRA) holds a 19 percent stake in Indocement, while the public owns 12 percent.

Indocement said the number of shares Heidelberger would purchase depended on the rupiah's exchange rate against the U.S dollar.

Assuming an exchange rate of Rp 10,500 per U.S dollar, and assuming other shareholders do not exercise their rights, Heidelberger may acquire a 60.62 percent stake in Indocement, according to the company.

Heidelberger would not pay cash for the new shares but it had agreed to take over $150 million of Indocement's debt to foreign creditors, Indocement explained.

The move will reduce Indocement's debt to $900 million from $1.1 billion, and is part of a debt restructuring deal.

"The plans are the continuation of the company's debt restructuring, which was initiated through the debt restructuring plan in December 2000," Indocement said.

In December last year, the company secured a $1.1 billion debt restructuring deal with its creditors.

Thursday's extraordinary shareholders meeting was attended by 80 percent of the total independent shareholders.

Shareholders also agreed on management plans to enter a distribution agreement with HC Trading International Inc, a subsidiary of Heidelberger.

Indocement said that the distribution agreement would be effective only should Heidelberger become a strategic investor of Indocement.

"In the event that the domestic market has not fully recovered, the increase in export sales should assist in maintaining the economic level of the company's (Indocement) operation," Indocement said.

Indocement's shareholders further approve plans to hold a 100 percent stake in cement distributor PT Dian Abadi Perkasa.

Indocement already owns a 51 percent stake in Dian Abadi, and shareholders approved the purchase of the remaining 49 percent.

The company did not say how much it must spend to obtain the remaining 49 percent in Dian Abadi.

Dian Abadi is Indocement's main domestic cement distributor, and its purchase is also part of the company's debt restructuring plan.(bkm)