Swiss group to own 74.5% of Semen Cibinong

JAKARTA (JP): The Swiss-based cement group Holcim Ltd., formerly known as Holderbank Financiere Glaris Ltd., plans to raise its stake to 74.5 percent in publicly listed cement producer PT Semen Cibinong, as part of the latter's debt restructuring deal.

In an advertisement published in the daily Harian Ekonomi Neraca on Wednesday, Cibinong said its debt restructuring deal would cause founding shareholder PT Tirtamas Majutama to relinquish all of its shares to its creditors and Holcim.

Under the deal, Tirtamas will lose its current stake of 43.31 percent, while the public's ownership share of 44.19 percent will be diluted to 6.7 percent, the company said.

The deal requires an independent shareholder's approval, for which Cibinong plans a shareholder's meeting on June 26.

Cibinong said the debt restructuring plan followed Holcim's agreement last year to become Cibinong's majority shareholder.

"As a follow up (to the agreement), from August until December 2000, Holcim held intensive debt restructuring talks with Cibinong's creditor steering committee," Cibinong explained.

The creditor steering committee, comprising local and foreign creditors, supervises the restructuring of Cibinong's debts worth some US$1.18 billion.

Cibinong said that under the mediation of the Jakarta Initiative Task Force (JITF), Holcim and the steering committee signed a preliminary agreement on which they later set up the terms and conditions of a debt workout plan.

The plan was approved by 91 percent of Cibinong's creditors, outside bond holders, during a presentation last March.

The debt restructuring plan covers three stages; at each stage Holcim will step up its ownership in Cibinong.

At the first stage, Holcim will absorb Cibinong's debt and convert it to equity. The Swiss company will purchase the debts at discounted rates under the Dutch Auction method, for which Holcim will set aside $175 million.

Following this, Holcim's stake in Cibinong will increase to 58.5 percent stake from the present 12.5 percent.

At the second stage, Cibinong will pay up principle debts of $35 million from accumulated funds in the company's escrow account.

Cibinong will also seek refinancing by swapping principle debts of $500 million into new long-term debts. Depending on the creditors' preference, the new loans will comprise commercial papers and bank loans.

The company plans to convert the remainder of its debts into equity worth 26.3 percent, or another 7.53 percent for Holcim.

At the third stage, Holcim will acquire the rest of Tirtamas' shares to meet its 74.5 percent stake, thus removing the latter from Cibinong.

Cibinong gave no details on the schedule of its debt restructuring plan.

Holcim is one of three foreign cement companies seeking to become majority shareholders in local cement producers.

German-based Heidelberger Zement AG was the first to gain majority control with a 61.7 percent stake in publicly listed cement producer PT Indocement Tunggal Prakasa.

Heidelberger's entrance was also tied to a debt restructuring deal between Indocement and its creditors.

Mexican-based PT Cemex Indonesia continues to hold a 25 percent stake in publicly listed state-owned PT Semen Gresik Group.

As part of the debt restructuring deal, Cibinong said it must also resolve issues surrounding the alleged missing overseas deposits of $255.73 million. (bkm)