Three foreign firms bid for stake in Semen Gresik

JAKARTA (JP): At least three international cement producers are to bid for part of the government's 65 percent stake in publicly-listed PT Semen Gresik cement company.

Semen Gresik president Urip Timuryono said yesterday the three companies were Germany's Heidelberger Zement AG, Switzerland's Holderbank Financiere Glarus and Mexico's Cemex CA.

"The three companies have conducted their due diligence and are to offer their bids to the state minister for Empowerment of State Enterprises today (Friday)," he told the media after a shareholder's meeting here yesterday.

He said that the company's management was not involved in the selection of the bidders but the opinions of Semen Gresik's management were taken into consideration.

"Though we are not involved, we proposed certain criteria for our new partners," he said.

These included an extensive global marketing network, the ability to develop the product and business and a strong information technology (IT) system.

"We think the three companies have met our criteria," he said.

Urip said that other international investors were still welcome to join the bidding process as no deadline had been set, or passed, for bids to be submitted.

Informed sources have said that four other international bidders are likely to be Blue Circle and Readymix Concrete of England, Lafarge of France, Italcementi of Italy.

Urip, however, declined to mention the proportion of the 65 percent government stake being put up for sale. The remaining 35 percent is owned by the public.

Urip said whether the government would give up its majority control of Semen Gresik would depend on the proposals offered by the potential strategic investors.

"The government is pleased with this level of interest from major multinational companies which demonstrates high foreign investor interest in Indonesia despite its dire economic condition. The candidates are also committed to expanding cement exports from Indonesia," State Minister for the Empowerment of State Enterprises Tanri Abeng said in a press statement later in the afternoon.

Michael Staheyeff, corporate finance director of Jardine Fleming, the foreign financial advisor for Semen Gresik, said that it was difficult to set the timetable for the bidding process.

"The timetable is not possible to say precisely. It's the nature of this kind of process," he said, but added that it might take more than one and half month.

The government recently appointed Jardine Fleming to help it sell off its 65 percent of Semen Gresik.

The government has also appointed nine international investment banks, including Goldman Sachs, Lehman Brothers, Credit Suisse First Boston, UBS/SBC Warburg Dillon Read, Salomon Smith Barney and Jardine Fleming to assist the government in the partial privatization of seven listed companies.

The government plans to privatize seven state companies and divest more stakes in five publicly listed state companies in the 1998/1999 fiscal year to raise Rp 15 trillion (US$1 billion) to support the financially strained state budget. (aly/rei)