Semen Padang upbeat over government's plan

Semen Padang upbeat over government's plan

JAKARTA (JP): The government is expected to announce its
decision on the spin-off of cement producer PT Semen Gresik as
early as next week, President of Semen Gresik's subsidiary PT
Semen Padang said on Monday.

Semen Padang president Ikhdan Nizar said that a team
evaluating Semen Gresik's spin-off plan, would present its
results to director general of state enterprises, I Nyoman Tjager
on Tuesday.

"If the alternatives are presented before him (Nyoman) by
April 10, he could make a decision by April 20," Ikhdan told
reporters.

He said that last Wednesday, the government formed a team to
evaluate various options in the planned spin off of Semen
Gresik's two units, West Sumatra's Semen Padang, and South
Sulawesi's PT Semen Tonasa.

The team, he continued, selected to represent the government's
51 percent stake in Semen Gresik consisted of the presidents of
the three companies.

Ikhdan, however, refused to reveal details of the review,
saying they were still confidential.

Plans to spin-off Semen Gresik's subsidiaries followed
protests by local residents in Padang, and South Sulawesi over
the foreign ownership in Semen Gresik.

In 1998, Mexican cement producer PT Cemex Indonesia entered
Semen Gresik with a 14 percent stake, which has since grown to
25.5 percent.

The government initially planned to divest its entire stake in
Semen Gresik, but faced strong opposition from locals at the
company's subsidiaries.

The government is considering compensating Cemex and other
Semen Gresik shareholders for the loss of the two subsidiaries.

Ikhdan said the government might trade its stake in Semen
Gresik for Cemex's stake in Semen Padang and Semen Tonasa.

A second solution, he added, was to trade Cemex's stakes in
the two companies with government shares in cement company PT
Indocement Tunggal Prakarsa.

Meanwhile, West Sumatra local activist Zukri Saad said that
neither his people nor Padang's local administration were
demanding a stake in Semen Padang.

The cement company, he said, was built on the land of our
ancestors, over which foreigners had no right of ownership.

"All we want is for the government to maintain its majority
stake in Semen Padang," he explained.

He said the people of Padang gave the government an ultimatum
to approve the spin off plan by April 20.

He declined to elaborate on the consequences of rejecting the
spin off plan but said it would aggravate separatist calls in the
province.

While the government cannot afford more political tension, the
spin off plan would annul a put option agreement it had signed
with Cemex.

Under the deal, the government had secured a right to sell its
remaining 51 percent stake in Semen Gresik at an agreed price of
$520 million.

The put option deal allows the government to gradually divest
its stake, while requiring Cemex to accept every sale offer of
the government.

Cemex said that it was still waiting for the government's
formal proposal on the spin off plan.(bkm)