The management of state-owned cement producer PT Semen Gresik (SG) has asked the government to buy back shares in Cemex to resolve a protracted dispute over Cemex’s investment in the state-owned company.
SG president Satriyo said this option would have less of a negative impact on the future operation of the company, and would satisfy both Cemex and the government. "The government should buy back the shares at a premium price rather than proceeding with the case through arbitration .... It is more efficient and I believe the government has the funds for that," Satriyo said over the weekend.
Cemex bought a 25.5 percent stake in SG from the government for US$290 million in 1998, with an option to increase the stake to 51 percent by the end of 2001. The sale was part of the government’s privatization program. Attempts to resolve this problem have been unsuccessful, leaving Cemex’s investment here facing an uncertain future. The company has asked the International Center for the Settlement of Investment Disputes (ICSID) to act as an arbiter in its dispute with the government over its investment in SG, Indonesia’s largest cement maker. Cemex has asked the ICSID to rescind the 1998 purchase agreement and has demanded that the government cover its investment outlay and pay damages.