Krakatau Steel delays privatization schedule
Krakatau Steel delays privatization schedule
JAKARTA (JP): The state-owned steel manufacturer PT Krakatau
Steel announced on Monday that plans for its privatization have
been delayed until the year 2000 due to weak international steel
prices.
Company president Sutrisno said international steel prices had
plunged to a record low of US$200 per ton from between $310-$370
per ton early last year due to weak demand in the wake of
declining global economic growth.
"We will sell the shares when steel prices are strong," he
told reporters at a breakfast gathering.
He said steel prices had now bottomed out and were expected to
increase in the middle of next year.
Krakatau Steel was among 12 state-owned companies which were
to have been privatized in the current fiscal year.
A sluggish capital market has forced the government to cut
privatizations in the 1998/1999 fiscal year to 10 companies.
In addition to Krakatau Steel, the government has also
postponed plans to privatize domestic telecommunications provider
PT Telkom.
State Minister of the Empowerment of State Enterprises Tanri
Abeng was lambasted by the press in June when he quietly drafted
a memorandum of understanding (MOU) promising to sell 49 percent
of Krakatau Steel to the Dutch company Ispat International for
the relatively cheap price of $400 million.
Tanri claimed that no underhand deals were involved and said
the memorandum was the initial step in an otherwise transparent
privatization process.
Sutrisno explained that Krakatau Steel has been increasing its
exports to Europe and the United States since early this year due
to sluggish domestic demand.
He added that the company would try to maintain its
traditional Southeast Asian export market, despite the economic
crisis that has plagued the region since the middle of last year.
Krakatau Steel, with an annual production of three million
tons, exported a total of 100,000 tons of steel to Europe and
70,000 tons to the U.S. in the first half of this year, he said.
He also said the company booked a gross profit of Rp 400
billion ($53.3 million) in the first half of this year.
Pre-marketing
Separately, Sofyan Djalil, deputy for communications at the
office of the State Minister of the Empowerment of State
Enterprises, said that pre-marketing of state-owned tin mining
company PT Tambang Timah, gold and nickel mining company PT Aneka
Tambang and plantation company PT Perkebunan IV would start early
next month.
He said detailed information about the three companies,
including the size of stake available to strategic investors is
being prepared by the government's financial advisors and should
be complete by the end of this month.
Morgan Stanley and Paribas have been appointed as the
financial advisors for Tambang Timah and Aneka Tambang, and
Jardine Fleming is looking after the affairs of Perkebunan IV.
"Investors interested in the companies can make their bidding
prices based on the information we are preparing," Sofyan told
reporters on the sidelines of a seminar on Monday.
Pre-marketing of the three state firms will follow a similar
process begun late last month for the state-owned international
call operator PT Indosat.
PT Indosat will become the second state firm to be privatized
this fiscal year after state-owned cement maker PT Semen Gresik,
in which a 14 percent stake was sold to Mexico's Cemex SA de CV
late last month. (rei)