Semen Gresik can't help Semen Padang's debt woes

The Jakarta Post, Jakarta

State-owned cement maker PT Semen Gresik said on Friday that it could not provide funds to help repay the maturing debt of its fully-owned subsidiary PT Semen Padang.

Semen Gresik president Satriyo was quoted by Detik.com on Friday as saying the company, together with Semen Padang, was trying to seek a rescheduling facility from the latter's creditors.

He was speaking following the company's annual shareholders meeting.

Semen Padang's medium term notes worth Rp 200 billion (US$23 million) will mature in August.

The fact that Semen Padang may default with its debt contradicts with claims made by its top management before that the company was in a financially solid condition that it did not need the support of any new investors.

The managers of Semen Padang had been fiercely fighting against the government's plan to sell a 51 percent stake in Semen Gresik to Mexico's cement maker Cemex SA de CV. Semen Padang, which is based in West Sumatra, demanded the government spin off the company from Semen Gresik before proceeding with the divestment program. The government had to cancel the privatization program due to strong opposition.

The company's management and employees, backed by local legislators, took to the streets, rejecting a foreign majority shareholding in Semen Padang.

Meanwhile, Semen Gresik said Friday shareholders approved the payment of a Rp 267.61 cash dividend per share for 2001.

Semen Gresik said it will set aside 50 percent of its 2001 net profit to pay the dividend.

The company booked Rp 317.47 billion in net profit, compared with Rp 343 billion in 2000.

The cement producer hasn't yet determined a date for payment of the dividend.

Elsewhere, Satriyo expected domestic market share to remain between 44-45 percent this year amid flat growth for cement demand.

He was quoted by Dow Jones as saying that the domestic cement market continued to face oversupply, while demand was still low.

"We hope our market share will be steady between 44 percent and 45 percent," he told reporters.