Pupuk Kaltim plans to sell 49% stake via IPO

JAKARTA (JP): State-owned fertilizer firm PT Pupuk Kaltim plans to sell a 49 percent stake this year as part of the government's privatization program, according to company president Syaiful Amir.

Syaiful said on Thursday that the privatization program would be conducted through an initial public offering (IPO).

"We have completed our preparation (for the IPO)," he told reporters on the sidelines of a meeting with government officials.

But Syaiful said that the size of the IPO had yet to be approved by the government.

He also said that the company was still negotiating with the government over certain issues including obtaining a long-term natural gas purchase contract from the government or state-owned oil and gas company Pertamina.

Syaiful said that the company currently only has a three-year gas purchase contract with the government, while investors want the company to have a 10-year contract.

He did not provide further details about the gas purchase contract, but according to a November 1997 document of Pertamina, Pupuk Kaltim paid US$1 per MMBTU (Million British Thermal Unit) for the gas, which was much lowered compared to the purchasing price of other companies.

"But the IPO plan would also depend on the market condition," Syaiful said.

The government has named Pupuk Kaltim as one of eight state- owned enterprises to be privatized this year in a bid to raise about Rp 6.5 trillion in proceeds to help finance the 2001 state budget deficit.

Director general of state-owned enterprises I Nyoman Tjager said earlier this month that the government would first sell state-owned pharmaceutical company PT Indofarma through an IPO, which is expected to be completed in the first quarter of this year.

Other state companies to be privatized this year include pharmaceutical company PT Kimia Farma, publicly-listed general mining firm PT Aneka Tambang, non-listed coal mining company PT Bukit Asam, chemical firm PT Petrokimia, airport operator PT Angkasa Pura II, and plantation firms PTPN III or IV.

The government failed to launch its privatization program last year amid domestic political and security unrest.

Elsewhere, Syaiful said that the company would start operating a new plant in Bontang, East Kalimantan province, some time in May next year, which would boost production to three million metric tons.

Pupuk Kaltim's production level in 2000 was 2.5 million tons.(rei)