Semen Gresik to spin off Semen Padang
Semen Gresik to spin off Semen Padang
JAKARTA (JP): State Minister of Investment and State
Enterprises Development Laksamana Sukardi said on Monday the
government would spin off PT Semen Padang from state cement maker
PT Semen Gresik in a bid to smooth the plan by Mexico's Cemex SA
de CV to become the majority shareholder in the company.
"We will spin off Semen Padang," Laksamana told reporters on
the sidelines of a business gathering.
He declined to provide further details.
Laksamana was responding to concerns that the plan by Cemex to
increase its stake to become the majority shareholder in Semen
Gresik would be rejected by the people of Padang in West Sumatra
province.
The West Sumtara-based Semen Padang is wholly owned by Semen
Gresik. An earlier attempt by Cemex to obtain a majority stake in
Semen Gresik failed following the West Sumatran people's
widespread rejection of foreign control in Semen Padang.
Local people have argued that Semen Padang's factory is built
on their heritage land.
Laksamana said on Friday the government had tentatively agreed
to a proposal by Cemex to increase its stake to become the
majority shareholder in Semen Gresik, the country's largest
cement maker.
Cemex currently owns 25.53 percent of the publicly listed
cement maker. The government owns 51 percent, and the public 23
percent.
Separately, Semen Gresik president Urip Timuryono said on
Monday that the company had no objections to divesting its
ownership in Semen Padang.
"It's very possible. We have no objection to the demand for
the group to spin off Semen Padang," Urip said on the sidelines
of a meeting with the House of Representatives Commission V for
trade and industry.
Semen Gresik, based in East Java, acquired Semen Padang from
the government in 1995 as part of the consolidation of state-
owned cement factories. The company also acquired another
government-owned cement maker in South Sulawesi called PT Semen
Tonasa.
Urip said the value of Semen Padang must be determined by an
independent appraisal before the sale process started.
He said his office was currently in the process of talking
with people from Semen Padang and the West Sumatran
administration over the spin off plans.
He stressed, however, that the spin off plans must be
conducted in a transparent manner.
Timuryono declined to comment on Cemex's plans to become the
majority shareholder in Semen Gresik, saying his office was still
talking with its Mexican counterparts.
Cemex, the world's third largest cement maker, bought a 14
percent stake in Semen Gresik in 1998 for US$1.38 per share, or
$114.6 million.
The previous administration of president B.J. Habibie
initially planned to sell 35 percent of the government's stake in
Semen Gresik as part of its privatization program to raise cash
to finance the state budget.
Cemex won the first round of the bidding process for the
government's 35 percent stake in July 1998.
But the decision was met with protests by West Sumatrans as it
would have given Cemex control over Semen Gresik as well as Semen
Padang. This forced the Habibie administration to divest only 14
percent of the government's stake.
Cemex now owns a 25.53 percent stake in Semen Gresik after
increasing its investment in the company by buying additional
shares on the open market.
Laksamana is now under pressure to raise some Rp 6.5 trillion
from the government's privatization program this year to help
finance the April-December 2000 state budget.
The privatization revenue target was initially set at Rp 5.9
trillion, but legislators forced the government to raise the
target in order to fund a larger increase in the salaries of
government employees.
The further divestment of Semen Gresik would help raise the
privatization proceeds target.
The government plans to divest between 20 percent and 49
percent of its stake in eight state companies. These companies
are fertilizer firm PT Pupuk Kaltim, airport operator PT Angkasa
Pura II, coal mining company PT Bukit Asam Batubara, plantation
firms PT Perkebunan Nusantara III and PT Perkebunan Nusantara IV,
pharmaceutical manufacturers PT Indo Farma and PT Kimia Farma,
and publicly listed mining firm PT Aneka Tambang.
Separately, Riza Primadi, public relations chief at
Laksamana's office, said on Monday that Pupuk Kaltim would be the
first company to go on sale through an initial public offering
(IPO) on both the domestic and the overseas market.
He said that the IPO was expected to be completed either in
April or May.(rei/cst)