Investors to reclaim Cemex shares in SG
Rendi A. Witular, Jakarta
Due to a projected boom in cement demand in the next couple of years, foreign and local investors have expressed their interest in acquiring the shares of Mexican cement giant Cemex SA in state-owned cement producer PT Semen Gresik (SG), a minister said.
State Minister of State Enterprises Laksamana Sukardi said the government had been approached by local and overseas investors, mostly cement producers, to buy shares in the country's largest cement-maker.
"There are several local and international cement producers interested in buying Cemex shares in SG, due to the projected strong demand for cement," said Laksamana after a hearing with the House of Representatives Commission IX for financial affairs on Monday.
"However, they are currently still waiting for the settlement of legal dispute between Cemex and the Indonesian government at the arbitration court, in order to ensure legal certainty of their future investment here," he said.
The plan by new investors to acquire Cemex's shares in SG fits in with the government's earlier proposal to repurchase the Cemex ownership as a way to resolve the investment dispute faced by the Mexican firm here.
The government is currently seeking third-party investors to finance the buyback plan since the government does not have sufficient funds. Laksamana previously said his office had asked state pension fund PT Jamsostek to lead funds to a consortium that would carry out the buyback program.
"If the investors are still reluctant to buy Cemex shares, the government has already provided a standby buyer which consist of pension funds such as Jamsostek," Laksamana said.
Cemex has a 25.53 percent stake in the publicly listed SG while the government has a 51.01 percent stake, with the remainder held by the public.
A source at the Office of State Minister of State Enterprises said Cemex had asked the government to buy back its shares at a price of at least Rp 14,500 per share, or about Rp 4.5 trillion (US$500 million) for its stake.
The Cemex investment dispute emerged after the West Sumatra- based PT Semen Padang, a unit of SG, and local politicians opposed plans by Cemex to buy more shares in SG to become a majority owner, as stipulated under a 1998 investment deal made with the government when the Mexican firm first bought the SG shares.
Attempts to resolve the problem have been unsuccessful, leaving Cemex's investment in limbo. The company has taken the case to the International Center for the Settlement of Investment Disputes to act as an arbiter in its dispute with the government and SG, Indonesia's largest cement producer.
The Indonesian Cement Association (ASI) has previously projected cement demand at home would soar to 46.5 million tons per year in the next couple of years, compared with the current 27.5 million tons, while exports would jump to 12 million tons to 15 million tons.
It said the existing capacity of local cement producers would not be able to meet such high demand, due to the robust growth in the construction and property sector, unless there was an expansion in production.