Kalla insists new SG shareholder must comply

Kalla insists new SG shareholder must comply
Published: 12 June 2006

Vice President Jusuf Kalla insisted Friday that whoever eventually bought a stake from Cemex SA in state-controlled cement producer PT Semen Gresik (SG) would have to comply with the requirements laid down by the government.   Although saying that he had yet to receive a report on the latest developments in the Cemex-Semen Gresik saga, Kalla reiterated the government’s stance that the stake should be bought by a local investor, and that a portion of the shares be sold to local government companies. 
 
 "The new shareholder should be a local firm, be willing to accommodate the interests of the local administrations, prevent the emergence of a cement cartel and help resolve the ongoing arbitration issue," said the former businessman.  
 
With a some 25.5 per cent shareholding in SG, Mexican-based cement giant Cemex SA is in the process of selling 24.9 percent of its shareholding to diversified business group Rajawali after recently rejecting the government’s proposal to buy the stake.  
 
Cemex initially signed a deal with Rajawali, founded by tycoon Peter Sondakh, to sell the SG stake for US$337 million. The divestment is part of Cemex’s exit strategy to end a five-year dispute with the government, which has consistently failed to honor a 1998 deal that would have gradually allowed Cemex to become the majority shareholder in SG. Cemex has filed for international arbitration against the government.  
 
However, State Minister for State Enterprises Sugiharto is still negotiating with Cemex in a bid to convince it to accept the government’s proposal under which a consortium consisting of state and local government companies would purchase the SG stake.  
 
"I think a transaction is still in the works. If there has been a mistake, we will fix it. The state minister for state enterprises is still dealing with it," said Kalla.   Should the government finally agree to the Cemex-Rajawali deal, Rajawali has until the end of this month to close the deal. (Jakarta Post report)