Semen Gresik to float rights shares
JAKARTA (JP): The minority shareholders of the publicly-listed state-owned cement firm PT Semen Gresik voted yesterday in favor of the company's proposal to acquire two other state-run cement companies, PT Cement Padang and PT Semen Tonasa.
Semen Gresik's president, Anang Fuad Rivai, told journalists after an extraordinary meeting of shareholders at the Hilton Executive Club that the company had secured 54.47 percent of minority votes.
Those opposed to the acquisition plan represented 369,000 shares, only 1.01 percent of the total 36.44 million minority shares, and abstentions represented 307,000 shares, Anang said.
Under Indonesian regulations, any public company's move to acquire another company needs the approval of its minority shareholders.
Semen Gresik announced early last month its plans to consolidate its production capacity with that of the two cement companies.
Anang said that the acquisition of the two cement firms would enable Semen Gresik to improve operational efficiency and market penetration with nationwide distribution.
He said Semen Gresik, with its production units in Gresik and Tuban, East Java, focuses distribution in East and Central Java and Semen Padang, with its plant in Padang, West Sumatra, serves western provinces, while Semen Tonasa, with its production facilities in Tonasa, South Sulawesi, concentrates on marketing in the eastern provinces.
Rights
Yesterday's meeting also approved Semen Gresik's plan to float 444,846,000 rights shares at an offered price of Rp 3,275 (US$1.47) per share to finance the acquisition and expand the company's production capacity.
"Shareholders can buy three rights shares for each of their existing shares," Anang said, adding that the rights issue would be held on Aug. 7.
He said the acquisition of the two cement firms would cost Semen Gresik Rp 1.06 trillion ($478 million) or about 74 percent of the capital to be raised. Five percent of the proceeds will be used to repay the debts and strengthen the capital structure of Semen Padang, while the rest will be used to expand Semen Gresik's own production capacity.
Semen Gresik was initially scheduled to conduct an extraordinary shareholders' meeting last Tuesday. However, the meeting was unexpectedly adjourned until yesterday after Anang was suddenly summoned by Minister of Industry Tunky Ariwibowo when the meeting was about to start.
Many speculated that the postponement of last Tuesday's meeting was prompted by pressure from the country's current largest cement producer PT Indocement Tunggal Prakarsa, which does not want its market standing to be shaken by Semen Gresik after the consolidation.
"It had nothing to do with Indocement. Pak Ari (Minister Tunky) just wanted to give me some jobs to do because he was about to go abroad for post-CGI meetings," Anang said, referring to the World Bank-sponsored Consultative Group on Indonesia (CGI), which pledged on Wednesday to help Indonesia with total aid of $5.36 billion.
The acquisition of the two cement firms will boost Semen Gresik's annual production capacity to 8.58 million tons from the current 4.1 million tons. Semen Padang's current annual capacity stands at 3.3 million tons, while Semen Tonasa's is 1.3 million tons.
After the completion of the construction of Semen Tonasa's new production unit next year, Semen Gresik will have a combined annual capacity of 10.88 million tons, making it the largest among cement producers in Indonesia. Currently, Indocement is the largest cement producer, with a capacity of 9.2 million tons per annum.
Anang said Semen Gresik started building a new cement production facility in Tuban early this year. The construction of the new facility, which will have an annual capacity of 2.3 million tons, will be completed by the middle of 1997 and will start commercial production by early 1998.
Semen Gresik plans to start constructing another cement production unit in Tuban later this year. The unit, which will also have an annual capacity of 2.3 million tons, is expected to start commercial production in the middle of 1998.
The company plans to build a new cement production unit with an annual capacity of 2.3 million tons in Indarung, West Sumatra, early next year, which is expected to start commercial production in 1998.
"In 1998, our combined annual capacity will reach 17.8 million tons. And it will still be the largest producer in the country," Anang said.
Semen Gresik, listed on the Jakarta Stock Exchange in 1991 and the first state-owned Indonesian enterprise to be privatized, recorded net sales of Rp 309 billion and a net profit of Rp 54.7 billion last year. (rid)