Semen Gresik to set up finance firm
Semen Gresik to set up finance firm
JAKARTA (JP): The publicly-listed cement producer, PT Semen
Gresik, received approval from its shareholders yesterday to set
up a finance firm in the Netherlands called Gresik Cement Finance
BV, with an authorized capital of 400,000 guilders (US$241,509).
Semen Gresik's president, Urip Timuryono, told journalists
after an extraordinary shareholders meeting that the new company
expects to issue US$100 million in Eurobonds on the Luxembourg
stock exchange in May.
"We prefer to do it this way because we can control the
planned company, which will be 100 percent owned by Semen Gresik,
and minimize the risk of the debt issue," he said.
Moreover, according to Urip, Semen Gresik will act as
guarantor of the issue, not the subsidiary.
He said the total proceeds from the bonds will be used to
finance the construction of Semen Gresik's Tuban III plant in
Tuban, East Java.
"We need a total investment of Rp 700 billion for the Tuban
III plant. We will raise both onshore and offshore loans in
addition to our own equity. But equity financing will not exceed
five percent of the total," he said.
Skeptics
Urip countered skeptics who said that Semen Gresik should have
retained enough funds from its Rp 1.7 trillion rights issue last
year to build Tuban III.
He said that for the acquisition of PT Semen Tonasa and PT
Semen Padang alone, Semen Gresik spent Rp 1.06 trillion, or 74
percent of its total proceeds.
Another five percent was used to repay debts and to strengthen
Semen Tonasa's capital structure.
The remaining 20 percent went to construction of the Indarung
plants in West Sumatra, Tuban II and Tuban III.
"The fund for Tuban III was not more than five percent of the
total," he added.
Urip said that construction of the Tuban III plant began in
the fourth quarter of last year. It will commence commercial
production in June 1998 with a production capacity of 2.3 million
tons of cement per annum.
He said that with the acquisition of the two other state-owned
cement firms -- Semen Tonasa and Semen Padang -- Semen Gresik has
a combined production capacity of 10.8 million tons of cement per
annum.
"Semen Tonasa will complete the construction of its new
production unit with an annual capacity of 1.3 million tons this
year," he said.
Urip declined to discuss Semen Gresik's performance last year
or projections for this year.
"We will try to maximize the utilization of the production
capacity," he said.
Semen Gresik's consolidated assets, according to Urip, stand
at Rp 4.2 trillion. (08)