VP backs state firms to take Cemex

VP backs state firms to take Cemex
Published: 22 May 2006

Vice President Jusuf Kalla has expressed confidence that the country’s state-owned enterprises are financially capable of purchasing Mexican cement giant Cemex SA’s stake in state-owned cement company PT Semen Gresik. While refusing to confirm whether the government would exercise its preferential option to buy the stake using state firms as vehicles, the Vice President said Friday that the public should support the purchase of the stake by state enterprises.

"Our state companies are rich enough. If the government exercises its right to buy the stake, the state companies will provide the funds. These companies are not third parties but are owned by the state," said Kalla.

"The only interests here are those of our state companies. The public should support these efforts as it is our state companies that are trying to buy the stake rather than foreigners," said Kalla. He said that he also hoped to see a settlement with the concerned local administrations, and the resolution of the ongoing arbitration process filed by Cemex.

A source at the State Ministry for State Enterprises said the government had arranged a consortium consisting of insurance firm PT Taspen, social security insurance provider PT Jamsostek, investment firm PT Danareksa, and Semen Gresik itself. Should the consortium eventually purchase the stakes, it would then allocate some of the shares for purchase by local administrations under the same conditions. "One of the reasons why the government has rejected the Rajawali bid is because the company has refused to allocate some of the shares to the local administrations," said the source.