Indonesia may study Mandiri stake sale

The government may study a proposal to divest a 10 per cent stake in PT Bank Mandiri to raise funds for settling its long-standing dispute with Mexican cement maker Cemex SA over a failed put option deal in PT Semen Gresik, Deputy State Enterprises Minister Roes Aryawijaya said.

He made the comment in response to Bank Mandiri president ECW Neloe’s suggestion that the government should sell a further 10 per cent stake in the bank for funding a buyback of Cemex’s 25.53 per cent stake in Semen Gresik from Cemex.  ’It could be an alternative. We will try to look at it,’ Aryawijaya told reporters at the parliament. He added that the buyback could cost the government US$400-450m.

’Obviously we still want to settle the case out of court, and the negotiations are ongoing,’ Aryawijaya said. The present government has shortlisted a number of options to settle the Cemex dispute, with the most likely one being to sell Semen Gresik’s cement plants - Tuban I, Tuban II and Tuban III - to Cemex. Meanwhile, Cemex has temporarily suspended international arbitration proceedings and is hoping to reach a deal with the government by end of this month.

Aryawijaya said the government and Cemex have agreed to appoint an independent appraisal firm to conduct a valuation of Semen Gresik’s assets. The assets include Tuban I, II, III plants, Indarung I, II, III, IV, and V plants, and Pangkep I, II, III, IV cement plants. Tuban plants are owned by Semen Gresik, while Indarung and Pangkep plants belong to Semen Gresik’s units PT Semen Padang and PT Semen Tonasa. Sugiharto said the valuation would help Semen Gresik prepare strategic plans
for the future.