Mon, 26 Jun 1995

Semen Gresik seeks Rp 1.45t from rights issue

JAKARTA (JP): Publicly-listed PT Semen Gresik expects to raise around Rp 1.45 trillion (US$653 million) from its rights issue next month.

Semen Gresik's president, Anang Fuad Rivai, said over the weekend that part of the proceeds from the rights issue will be used to take over PT Semen Padang in West Sumatra and PT Semen Tonasa in South Sulawesi.

Another segment of the proceeds from the limited public offering will be used to finance the expansion of the two cement producers, Anang explained.

He said the rights issue will be launched next month at a one- for-three ratio, in which each existing share will give shareholders the right to buy three new shares.

The rights shares will be sold to existing shareholders at Rp 3,375 ($1.53) apiece, around 80 percent lower than last week's average price.

Anang said the planned acquisition, which will cost around Rp 1.06 trillion ($479 million), is expected to boost Semen Gresik's production capacity to 8.58 million tons per year from 4.1 million tons at present.

He said the planned takeover of the two cement producers will make Semen Gresik the second largest cement producer in the country after the publicly-listed Indocement, which has a production capacity of around 9.2 million tons per year.

Price

The share price of Semen Gresik, the first state-owned company listed on the Jakarta Stock Exchange, has gained ground in recent months following the announcement of the company's takeover plan in April. The share price of the East Java-based cement producer reached its peak level on Friday, closing at Rp 14,950, almost double its level of Rp 7,500 in January.

The government's plan to consolidate Semen Padang and Semen Tonasa into Semen Gresik was announced in April after the first two failed to carry out their own initial public offering plans.

The two cement producers' plans to launch initial public offerings were announced as early as 1992, but they suspended the business maneuvers due to what their managements called unfavorable market conditions.

Securities analysts said the heavy financial burden the two cement producers faced in preparing for the initial public offerings was even more of a hindrance than the market problem.

"The back listing through Semen Gresik will significantly reduce the financial costs," an analyst at a local brokerage company said.

Semen Padang, which currently produces around 3.27 million tons of cement per year, sells its cement products in Sumatra and several parts of West Java.

Semen Tonasa, the only cement producer in South Sulawesi, produces around 1.18 million tons per year and sells its products in Sulawesi and other eastern Indonesian provinces. (hen)