Ministry to cancel more IPOs of state companies

The Jakarta Post, Jakarta | Tue, 01/20/2009 2:54 PM  

The State Ministry of State Enterprises announced Monday it would cancel plans to privatize several state companies which are currently struggling financially. 

“We are now reviewing state companies in our privatization list and have decided so far to drop (plans to go public of) some of them,” State Ministry of State Enterprises secretary Said Didu told reporters. 

He did not elaborate on which companies were to be dropped from the list, but certainly this included those in poor financial condition. 

“These companies will either be acquired by another state company or liquidated,” he said. 

Soda maker PT Industri Soda Indonesia and paper maker PT Kertas Kraft Aceh are among the companies the ministry would soon liquidate, Said explained.  

Last December, the ministry announced plans to sell shares in 30 state owned companies this year, most of them through the initial public offering (IPO) scheme. 

The privatization program includes several IPOs carried-over from last year, including steelmaker PT Krakatau Steel, flag carrier Garuda Indonesia and Bank Tabungan Negara. 

Said added the ministry had to complete its review on privatization plans by the end of January.

Plantation firm PT Perkebunan Nusantara (PTPN) IV was among the companies ready for privatization, according to Said. 

PTPN expects to generate Rp 2.8 trillion from its IPO to partly finance expansion plans until 2012, budgeted at around Rp 13.04 trillion. 

The expansion includes the takeover of 77,000 hectares of land for oil palm plantations, the strengthening of downstream activities and revitalized railway construction. 

The plan is expected to boost PTPN’s revenue from Rp 4.46 trillion in 2008 to Rp 6.62 trillion in 2012 and its net profits from 731 billion to Rp 1.55 trillion in 2012.