Indocement expected to strike accord with foreign firms soon
Indocement expected to strike accord with foreign firms soon
JAKARTA (JP): Publicly listed cement maker PT Indocement
Tunggal Prakarsa is expected to strike an accord with two foreign
partners -- French firm La Farge and Germany's Heidelberger
Zement -- in February to set up a strategic alliance, an
executive of the company said.
Company corporate secretary Ria Sjahroni said on Wednesday
that the two firms had conducted a comprehensive due diligence on
Indocement late last year and a firm deal was expected to be
signed soon.
"We expect to strike the deal imminently ... hopefully it can
be concluded in February," Ria told The Jakarta Post.
German construction materials Heidelberger Zement has
confirmed that it was eying Indocement as one of the many
opportunities in Southeast Asia.
"Our chairman has said repeatedly during the past few weeks
that the East Asia region is one of great interest to us," the
company's spokesperson said as quoted by Dow Jones Newswires.
Ria said that the two firms would probably become the
controlling shareholders in the country's second largest cement
maker PT Indocement Tunggal Perkasa upon the conclusion of the
deal next month.
"The Salim Group might no longer be the majority shareholders
in Indocement upon the conclusion of the deal in February,' she
said.
Publicly listed PT Indocement is currently 55.08 percent owned
by the Salim Group through PT Mekar Perkasa, 25.73 percent by the
government, 4.42 percent by PT Kaolin Indah Utama and 14.77
percent by the investing public.
Indocement's stock was one of the most active concerns traded
in the Jakarta Stock Exchange (JSX) on Wednesday following the
news of the foreign interest in the company with its share
pricing closing firmer by Rp 650 to Rp 3,775 on Wednesday.
Despite the increase, the Jakarta Stock Exchange (JSX)
management though it had sent a letter seeking clarification of
the rise in the company's shares did not suspend its stock
trading on the grounds that the rise was still tolerable.
"We did not suspend the company's stock as the rise was still
within the range allowed by the regulations," a JSX management
official said.
The stock market rules stipulate that the JSX management has
to suspend the trading of a stock if its value rises or declines
by 30 percent.
Stock analysts said that Salim's move to divest its stake in
Indocement was aimed at trimming down its business interests in
Indonesia following the downfall of former president Soeharto
last May.
The Salim Group belongs to one of Soeharto's cronies.
It had earlier divested 96.77 percent of its entire stake in
instant noodle maker PT Indofood Sukses Makmur to Japan's Nissin
Food Corp. and Hong Kong's First Pacific Co. Ltd. recently. Salim
now has only about 2.65 percent of Indofood.
PT Indocement is the country's second-largest cement maker
holding 38 percent of the domestic market.
The company, which recorded a net profit of Rp 67 billion in
the first nine months of 1998, down from Rp 616.3 billion for the
same period in 1997, has US$936 million in overseas debt and Rp
another 180 billion in rupiah debts.
Ria said that Indocement had long sought a strategic alliance
with international cement players since early last year in its
efforts to improve its global marketing networks.
'Forming a strategic alliance with global players will
certainly enhance our international marketing networks," she said
pointing out that France La Farge and Germany's Heidelberger had
recognized the company's professional management. (aly)