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)