Privatization of PT Pupuk Kaltim
The Director General of State Owned Enterprises (SOEs) stated that, to support the privatization of PT Pupuk Kaltim, in the near future the government would divest this company from PT Pusri. He also said, the privatization of 16 SOEs this year would be conducted through initial public offerings (IPO).
According to the plan, the IPO of PT Pupuk Kaltim is expected to raise funds of Rp 1.8 trillion, most of which would be transferred to the State Budget for 2001.
For the present, amid the economic turbulence, any efforts which contribute to the realization of the 2001 State Budget should be supported and in this case the role of the Director General of SOEs is crucial for the success of PT Pupuk Kaltim to achieve the Rp 1.8 trillion, primarily by making every endeavor to accelerate the divestment prior to PT Pupuk Kaltim obtaining a stock exchange listing which is scheduled to be carried out in April of this year. Otherwise it could harm the intrinsic value of PT Pupuk Kaltim's shares on the stock exchange.
The acceleration of the divestment prior to the listing would increase the market price of Pupuk Kaltim's shares on the stock exchange because, based on the consideration of efficiency, practicability and flexibility, investors certainly would prefer a full SOE to a subsidiary.
By being restored to their respective original legal status, each of the fertilizer SOEs could enter into fair competition and have an opportunity to freely enhance their performance.
Furthermore, the government through the Director General of SOEs could appraise the ability of each board of directors of the existing fertilizer companies in operating its respective company.
In the era of open competition, the quality of leadership and capability of an executive is decisive for the success of an enterprise and that is why the system of reward and punishment should be applied by the government to stimulate all the management of the existing fertilizer companies to yield greater profits.
HASAN BASRI MUCHTAR
Jakarta