Ailing state cement producer PT Semen Kupang will be handed over to the Asset Management Company (PPA), a state-sanctioned agency tasked to restructure troubled state firms, to help put right the financial mess it is now in.
"The PPA will look into the matter to decide the best steps to take to restructure it," Secretary to the State Ministry of State Enterprises Said Didu said on Wednesday. "It may even become a shareholder of Semen Kupang if necessary."
Despite its financial problems, Said added, the firm -- which produced 300,000 tons of cement last year, has enough business potential for the state to hold on to it.
"I don’t see why we should hand over a company to foreign buyers rather than holding on to it if it’s profitable," Said added, referring to a failed move by an Indian firm to purchase the company.
Semen Kupang had to scale back its operation since May last year as it failed to settle a Rp 25 billion (US$2.3 million) debt to PT Sewatama Jakarta, one of its suppliers.
The debt is on top of the Rp 500 billion it owed to Bank Mandiri as of last August.
The state bank then converted part of its debt into Semen Kupang shares which made it one of the major shareholders of the company. Mandiri now has a 38 percent stake in the company, which was formerly a subsidiary of the country’s largest cement maker, PT Semen Gresik.
The other shareholders are central government, which holds 61.48 percent of PT Semen Kupang shares and a provincial government company PD Flobamora which owns 1.12 per cent or Rp 1.5bn.