Semen Gresik to Conduct Corporate Restructuring

Semen Gresik to Conduct Corporate Restructuring
Published: 15 February 2007

PT Semen Gresik Tbk has planned to conduct corporate restructuring by establishing holding companies to control some cement units like PT Semen Gresik Tbk, PT Semen Padang, and PT Semen Tonasa. 
 
An executive knowing the transaction said there will be two consultants that will help the company in conducting such restructuring. 
 
The Vice President Commissioner of Semen Gresik Darjoto Setyawan said that the company has assigned PT JP Morgan Securities Indonesia to become the financial advisor. 
 
The company also has assigned A.T. Kearney as the restructuring consultant. 
 
"We have opened a tender to get consultant for the restructuring. We have got two consultants -- AT Kearney as the restructuring consultant and JP Morgan as the financial consultant," he said yesterday. 
 
The Vice President of Semen Gresik Rudiantara added that last year’s AGM has asked the directors to find some consultants. 
 
But when asked on whether there has been a plan to convert the company to a holding company, he said that he did not know the plan. 
 
"Consultant will provide some options for us to review." 
 
In October 2006, Rajawali Group has said that it will support the effort of people of West Sumatra to place Semen Padang at the same position as Semen Gresik and Semen Tonasa. 
 
Rajawali Group has supported to convert Semen Gresik to PT Semen Indonesia as the holding company for the three units. 
 
The Research of Danareksa Sekuritas on February 9 concluded that Semen Gresik has been on the right track. The security company is sure that the stock price of Semen Gresik may still increase. 
 
Danareksa has recommended investors to buy the shares of Semen Gresik as the price target is IDR45,000 based on the assumption that company’s value is US$155 per ton, just as same as that of Indocement. 
 
Rudiantara added many parties have been sure that cement industry will be able to grow by 7% this year, amid the government’s plan to boost the development of infrastructure. 
 
"We hope that with the lower interest rate, the property business will increase so that the demand on cement will increase." 
 
Danareksa predicted that Semen Gresik will get the sales revenue of IDR8.98 billion this year and IDR9.75 trillion next year. The net profit will reach IDR1.46 trillion this year and IDR1.65 trillion next year. 
 
He said that the company has not taken final decision on the development of new cement facility. "We have been reviewing the plan so that it will be more effective." 
 
The management has planned to ask for shareholders’ approval on the facility development plan, but the company has been unable to convene EGM following the presence of Blue Valley Ltd, the vehicle of Rajawali Group to takeover 24.9% shares of Semen Gresik from Cemex Asia Holdings.