Goldman, Morgan in Talks to Buy Indonesian Brokers: Sources

Jakarta Globe, September 12, 2011

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Goldman Sachs and Morgan Stanley are each in talks to buy an Indonesian brokerage firm to expand their reach into the booming capital market of Southeast Asia’s biggest economy, sources said.

Goldman is in talks to buy Tiga Pilar Sekuritas and expects to complete the acquisition before the end of 2011 as it aims to start a local brokerage operation next year, two sources with direct knowledge of the deal told Reuters on Monday.

Goldman does not have an underwriting or broking license in Indonesia, while Morgan Stanley secured an underwriting licence in 2008, but is seeking a bigger presence through a full-fledged broker license.

Both banks plan to add research analysts as well as sales and trading staff to the brokerages next year, while Goldman could also add investment bankers, as they seek to win fees from equity offerings and debt deals, the sources said.

“I think this signals a positive view on our capital market ... It has really become an important destination for global investment banks,” said Winston Sual, who manages nearly $1 billion in funds at Panin Sekuritas in Jakarta.

“This will give more competition for fees among global bankers like JPMorgan and Credit Suisse.”

The banks’ plans in Indonesia, which has seen its stock market hit records this year on surging foreign investment, follow moves by Nomura Holdings and Citigroup to ramp up equity research teams in Jakarta this year to challenge leaders Credit Suisse and Deutsche Bank.

Investment interest in the G20 member is set to rise again next year, when Indonesia hopes to get an upgrade by Fitch Ratings to an investment grade sovereign rating that will put it alongside top emerging BRIC nations such as Brazil. 

Goldman has completed due diligence for Tiga Pilar and both parties are now negotiating the deal structure and valuation, said one of the sources, who all declined to be identified.

“Goldman has already asked Tiga Pilar to start looking for prospective staff and bankers as a precondition before they complete the deal,” said the source. No financial details were immediately available.

Officials at Tiga Pilar and Goldman declined to comment.

The Tiga Pilar deal size is likely to be small as Goldman is only seeking to buy the operating licenses that the deal will provide. It will need to at least inject the Rp 50 billion ($6 million) in license costs and required brokerage capital.

Tiga Pilar, partly owned by the family of Tan Pia Sioe, traded Rp 445 billion by stock value in the first six months of this year, ranking it 102 out of 117 active brokerages, according to stock exchange data.

The IDX composite index has jumped over 5 percent so far this year, topping the list of gainers in Southeast Asia. 

Goldman’s rival Morgan Stanley has also identified a target brokerage firm to acquire and hopes to conduct due diligence this year in order to start operations next year, said three other sources with direct knowledge of this deal.

“Talks are ongoing. It is still early to mid-phase. Morgan Stanley is talking to people,” said one of the sources. Sources declined to give the name of the target brokerage and no financial details were available.

A Morgan Stanley spokesman declined to comment. The talks are aimed at either buying a brokerage to get their seat on the stock exchange or to buy a seat from an existing brokerage, one of the sources said.

A full broking license would allow the firm to cover the secondary side of sales and trading as well as research, the source added.

Citigroup bought Indonesian brokerage Republik last year and this year added bankers and analysts, including veteran analyst Ferry Wong from Macquarie as its new head of research.

Citi was not in the top five for underwriting Indonesian equity deals last year but this year has surged up the league table to rank second among global banks, behind Deutsche.

Reuters

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South Korea Tobacco Firm Takes Over Indonesian Company

Jakarta Globe, July 23, 2011

Seoul. South Korean tobacco company KT&G said Thursday it had bought a controlling stake in Indonesian firm Trisakti to tap into one of the world's biggest markets.

KT&G on July 14 signed a deal to buy a 60 percent stake in Indonesia's sixth-largest tobacco firm for 140 billion won ($132.6 million), the company said in a statement.

Trisakti sold three billion sticks of cigarettes last year, KT&G said, citing a confidentiality agreement for its refusal to give more details of the deal.

The Southeast Asian nation of some 240 million people has one of the world's highest smoking rates with almost 70 percent of men aged over 20 indulging.

KT&G sought to benefit from Trisakti's sales networks and production of kretek, a clove cigarette popular among Indonesian smokers, the Maeil Business Newspaper quoted a senior executive as saying.

"We saw Trisakti's business potential due to its share of more than 90 percent in the local kretek market," it quoted KT&G executive Kang Cheol-Ho as saying in a meeting with investors on Wednesday.

KT&G, a former state--run monopoly once known as Korea Tobacco and Ginseng, was privatised in 2002. It has about 60 percent of South Korea's tobacco market.

AFP

Bank Mandiri, AXA to acquire ADB

The Jakarta Post, Jakarta | Tue, 04/05/2011

The country's largest lender by assets, Bank Mandiri, announced Tuesday its plan to acquire local insurance firm PT Asuransi Dharma Bangsa, as part of its partnership with French-based insurance company AXA S. A.

“After going through selection and negotiation processes with a number of global insurance firms, we have selected AXA S. A. as one of Bank Mandiri's strategic partners in developing our business,” the bank said in a press statement Tuesday.

“To realize [the partnership], Bank Mandiri is planning to acquire PT Asuransi Dharma Bangsa 'ADB'”,” it added as quoted by tempointeraktif.com.

The acquisition will be undertaken, the bank further explained, by purchasing 120,000 of 126,718 new shares ADB is planning to soon issue.

AXA, meanwhile, will buy the remaining 6,718 new shares, while taking over 73,292 ADB shares currently owned by Bank Mandiri Pension Foundation and PT Estika Yasakelola.

After the transaction completes, Bank Mandiri is set to own 60 percent of ADB's shares, while AXA the remaining 40 percent.

ADB's financial reports said its total assets stood at Rp 61.9 billion (approximately US$7.1 million) in 2010, a 40.5 percent increase from the year before; while its gross premium revenues reached Rp 28 billion, a 21 percent increase from 2009.

KPPU Says All Clear for Unilever Acquisition

Jakarta Globe | October 14, 2010

Jakarta. The Business Competition Supervisory Commission says it has no objection for Unilever Indonesia Holding BV to acquire Sara Lee Body Care Indonesia after it found no evidence of monopolizing practices.

The commission, also known as the KPPU, began a comprehensive evaluation of the companies’ products on July 9, particularly roll-on deodorants and men’s hair cream, after a preliminary study failed to reach a conclusion.

Under competition regulations, the merged company is not allowed to have more than a 50 percent share of the market for its products.

On Thursday, the KPPU said in an e-mailed statement that its evaluation had found no anticompetitive behavior that would negatively affect consumers because the markets for each product made it difficult to fix prices.

With roll-on deodorants, the proposed merger was found not to impact on other players’ entry into the market.

“Making deodorants does not require highly sophisticated technology, so the barriers to enter the market is relatively low,” the KPPU said.

As for men’s hair cream, the commission said the already saturated market would not allow for one company to dominate the market.

Franky Jamin, general manager at Unilever Indonesia, said the KPPU had never objected to the takeover bid.

In September 2009, Unilever’s parent company announced that it would acquire Sara Lee’s personal care brands in a deal worth $1.9 billion.

The KPPU requires companies to notify it of proposed mergers and acquisitions, or face billions of rupiah in fines.

Pertamina takeover plan confirmed

Nani Afrida, The Jakarta Post, Jakarta | Fri, 10/08/2010 10:00 AM

The government confirmed Thursday that Pertamina planned to acquire a majority stake in PT Medco Energi Internasional although the state oil and gas company has not issued an official statement on the plan.

State-Owned Enterprises Minister Mustafa Abubakar said that the state oil and gas company would take over the stake currently held by PT Encore Energy — a company owned by prominent Indonesian conglomerate Arifin Panigoro — through Pertamina subsidiary PT Pertamina Hulu Energy (PHE).

“The acquisition is now under negotiation,” he told reporters .

The minister said that the acquisition was part of PHE’s expansion program to further strengthen its oil and gas exploration and production operations.

Although Pertamina has not yet publicly announced the acquisition, Mustafa said that the state oil and gas company had reported the plan to his office and he expected negotiations would be completed before the end of the year.

Medco Energi was the first Indonesian company to operate in the oil and gas sector and has been listed on Jakarta Stock Exchange since 1994.

It has transformed itself from locally-focused company to an energy company operating throughout Indonesia and overseas, as well, with focus on oil and gas, power generation and renewable fuels.

According to the company’s 2009 financial report, Arifin’s Encore, which owns a 42.41 percent stake, is the single majority shareholder.

The public holds a 40.8 percent stake and is the second largest shareholder.

According to Bisnis Indonesia daily, Pertamina would acquire 46.41 percent stake in Medco.

Over the last three months, the firms have negotiated several cooperation agreements governing joint operations and mergers and acquisitions.

The takeover might cost Pertamina Rp 6.5 trillion (US$728 million), according to estimates.

On the acquisition, Medco Energi Internasional project director Lukman Mahfoedz declined to comment, saying that the company had not determined yet how great stake would be acquired by PHE.

“The decision will be in the hands of our company’s shareholders. I can’t comment,” he said as quoted by Bisnis Indonesia.

Pertamina corporate communications vice president Mochammad Harun said that the companies had not yet reached any agreement on the acquisition, nor on the percentage of shares to be acquired.

“When we have finished or closed the deal, we will inform the public,” he said as quoted by Republika online news portal.

Mochammad said that there were still processes that had to be completed before the company could acquire the stake officially.

He added that the company was conducting currently a study to determine which of Medco’s physical facilities could be synergized with Pertamina.

“We don’t have any deadline, because if we’re too hurried, the process can’t be optimized,” he said.

Earlier reports said that PHE postponed its initial public offering (IPO) plan this year due to the acquisition.

Medco Energi booked total revenues of $397.09 million in the first half of 2010, up 27.67 percent from $311.03 million in the same period last year.

Net profits rose 26.2 percent to $12.1 million in the first half, up from $9.6 million in the same period last year.

Revenues from oil and gas sales contributed $258.55 million to the total revenue from January to June while contracts and services provided $56.79 million, electricity and related businesses such as petroleum products contributed $30.24 million and $51.51 million, respectively. (rdf)

Yahoo Buys Indonesian Mobile Internet Company

Yahoo has bought Koprol.com, an Indonesian mobile location-based-services Web company similar to Foursquare in the U.S.

CIO.com, by Dan Nystedt on Tue, May 25, 2010

IDG News Service — Yahoo has bought Koprol.com, an Indonesian mobile location-based-services Web company similar to Foursquare in the U.S.

The purchase gives Yahoo an expert in location-based mobile services, including helping people find nearby local businesses complete with reviews, on their mobile phones, as well as seeing where friends are and what they're doing, and more. Prior to Tuesday's announcement, Yahoo had reportedly been seeking a deal for New York City-based Foursquare valued at over US$100 million.

Yahoo bought Koprol because people are increasingly using mobile devices to access the Internet, the company said in a statement. "This is especially true in many emerging markets where we are introducing the Yahoo brand to many new-to-Net users," said Rose Tsou, senior vice president of the Asia Region for Yahoo, in a statement. "Koprol was uniquely designed for mobile phones and within a year has already built a strong user base," she added.

Yahoo plans to introduce Koprol in new markets, but did not say when.

"For us, joining a company like Yahoo was an easy decision to make and will take Koprol to the next level. We are very excited," Koprol said on its blog, adding that Koprol is well suited for Indonesia and the emerging markets in general.

Avnet Inc. Announces Acquisition in Indonesia

Strategic Investment Expands ASEAN Coverage and Establishes Platform to Grow IT Solutions Distribution Business

Market Watch

PHOENIX, Apr 06, 2010 (BUSINESS WIRE) -- Avnet, Inc. (AVT 31.20, -0.75, -2.35%) today announced the acquisition of certain assets of PT Datamation Purwana Utama and PT Mitra Bisinfo Utama (Datamation) of Indonesia, expanding Avnet's footprint and customer base in ASEAN for value-added IT distribution. Founded in 1990, Datamation is a value-add IT distributor providing server, storage and software products to enterprise system integrators and resellers throughout Indonesia.

"This acquisition in Indonesia supports our strategic intent to further expand our footprint into emerging markets," commented Phil Gallagher, president, Avnet Technology Solutions, Global. "As we increase our exposure to these fast growing markets and build on our global supplier relationships we will accelerate our organic growth rate."

From its headquarters in Jakarta and a sales office in Surabaya, Datamation distributes a range of IT infrastructure products from leading suppliers including APC, HP, IBM, Lenovo NetApp and VMware. With more than 175 employees supporting 1,400 value-added resellers, Datamation generated revenue of approximately US$60 million in calendar 2009.

"The acquisition expands Avnet's footprint in ASEAN and provides new opportunities to accelerate growth in the region," stated KP Tang, president, Avnet Technology Solutions, Asia Pacific. "The platform Datamation has developed will be a key factor in launching our solutions distribution practice in Indonesia. We will leverage their talented associates and supplier partner relationships to offer a broader suite of products and services to customers in the largest national economy in Southeast Asia."

The operations of Datamation will be integrated into Avnet Technology Solutions' Asia Pacific business. The acquisition is expected to be immediately accretive to earnings and supports Avnet's return on capital goals.

Godrej Consumer buys Indonesian co for Rs 1,200 cr

Rs 600-cr Megasari makes household items.

Business Line, Our Bureau, Mumbai, April 6

Godrej Consumer Products (GCPL) has acquired Indonesia-based PT. Megasari Makmur Group for an estimated Rs 1,200 crore, its biggest buy so far. HSBC was the advisor to the transaction.

The Rs 600-crore Megasari group is a manufacturer and distributor of household products which include household insecticides, wet tissues and air fresheners. It is less than 15 years old and has plants in West Java.

Megasari is also the second largest player in the household insecticide market in Indonesia having a 35-per-cent share in the category with brands such as the Rs 250-crore Hit (household insecticide) followed by smaller brands Stella (air fresheners) and Mitu (babycare).

Interestingly, one of Godrej's own insecticide brands is called Hit.

Mr A. Mahendran, Director, FMCG Portfolio Cell for the Godrej Group, told Business Line, “The funding for the acquisition has been done through a mix of debt and internal accruals.”

Biggest deal

This is the biggest deal for the group so far and also makes it the third largest acquisition by an Indian company after the Tetley and Glaceau buyouts made by the Tata Group. For GCPL, this is the fifth acquisition. It recently bought the Nigerian personal-care company Tura, two hair care brands in South Africa, and the UK-based Keyline brands. More buys are in offing with the group keen on building a global presence.

In fact, according to analysts, mid-sized Indian FMCG companies are well positioned to go in for similar acquisitions especially when the rest of the world is still recovering from the 2009 global crisis.

Mr Mahendran said, “We will be taking our own products and leveraging the distribution strengths to emerge the leader in Asia's household insecticide business. We are already the leaders in the category in India, but are No 3 globally in this category after SC Johnson and Reckitt Benckiser.”

A cross-functional team comprising Godrej and Megasari employees will be headed by Mr Naveen Gupta, who will help integrate the operations of the two companies.

Mr. Adi Godrej, Chairman, GCPL, said: “Megasari Group provides us a strong platform to establish a significant foothold in Indonesia, which is among the largest consumer markets in Asia. As an emerging market multinational, this acquisition is an important step in our global 3 by 3 strategy, that is, presence in three continents — Asia, Africa and Latin America — through three core categories — home care, personal wash and hair care.”

GCPL has a 49 per cent stake in Godrej Sara Lee and is in the process of buying out the balance in the company. It is also acquiring the global assets of Sara Lee's household insecticide business.

GCPL has already got shareholder approval to raise up to Rs 3,000 crore through a combination of debt and equity which would be used for international acquisitions as well as to buy out Sara Lee.

The GCPL scrip was up 2.19 per cent on Tuesday and closed at Rs 277.60

Related Article:

Indian Group Snaps Up Indonesian Insecticide Maker Megasari

Pertamina Sets Aside $1b to Buy ConocoPhillips’ Local Assets

Jakarta Globe, Reva Sasistiya, January 25, 2010

State-owned oil and gas company PT Pertamina said on Monday that it has allocated $1 billion to acquire US oil giant ConocoPhillips’ assets in Indonesia and the rest of Southeast Asia.

“We are ready to acquire all of the available assets of ConocoPhillips, not only in Indonesia but also elsewhere in Southeast Asia,” said Basuki Trikora Putra, Pertamina’s vice president of communications. “We have allocated $1 billion for the acquisition plan.”

However, Jacob Kastanja, corporate communications manager for ConocoPhilips Indonesia, said the company did not intend to divest its Indonesian assets.

“ConocoPhilips remains committed to continue its strong business presence in Indonesia. Our assets in Indonesia are not part of the current divestment plan that was announced by our head office late last year,” Jacob said. “As you know, we have just seen North Belut’s first gas and ConocoPhilips is continuing with its plan for exploration drilling in Makassar Strait and Arafura Sea in 2010 and 2011.”

ConocoPhillips revealed in October that it planned to sell off some of its overseas assets over the next two years in a drive to raise $10 billion.

However, Bayu Kristanto, Pertamina’s vice president for mergers and acquisitions, said the company had informed ConocoPhillips of its interest. It is believed that ConocoPhillips’ Indonesia assets are worth $600 million to $700 million.

ConocoPhillips has been active in Indonesia for more than 40 years and operates seven production-sharing contracts. Four of the contracts are offshore projects, including the South Natuna Sea Block B in the Riau islands, the Kuma block in the Makassar Strait and the Amborip VI and Arafura Sea blocks southeast of Maluku province. It also operates three onshore fields, including the Corridor PSC and South Jambi B blocks in Sumatra as well as the Warim block in Papua.

Pertamina is also hoping to acquire the assets controlled by France’s Total in Indonesia, Basuki said. The state-owned company has previously said it is considering issuing dollar bonds worth $1 billion and $1.5 billion next year to finance its acquisition plans.

It has allocated Rp 39 trillion ($4.17 billion) for capital expenditure this year, with plans to allocate about 70 percent for exploration and production.

Pertamina will pump an additional 7,500 barrels a day from new fields as part of a drive to boost output by 8 percent this year.

Telkom looks to acquire smaller telcom firms

Ika Krismantari , The Jakarta Post , Jakarta | Wed, 12/02/2009 9:28 PM

The country’s largest telcom operator PT Telekomunikasi Indonesia (Telkom) plans to acquire several smaller local telcom firms including Bakrie Telecom next year, to expand its code division multiple access (CDMA) services.

Telkom finance director Sudiro Asno said Wednesday his firm was targeting companies outside its main competitors, PT Indosat and PT Excelcomindo Pratama, respectively the country’s second and third largest telco operator.

Telkom, he said, “Is only targeting ‘small guys’.” Sudiro did not elaborate but quickly added that “It hasn’t been decided yet. We are still in an early stage.”

Sudiro said that should the deal with Bakrie Telecom be reached, then Telkom may issue bonds next year to help finance the acquisition.

However, when The Jakarta Post mentioned the matter to Bakrie Telecom, the management said that they knew nothing about it.

“We have not had any talks whatsoever either with Telkom or within our internal management,” Bakrie Telecom director for development Rachmat Junaidi said over the phone.

He continued that the company was now focusing on developing the company’s business and did not have any plan to sell its shares to other parties.

Asian investors interested in buying former Bank Century

Antara News, Friday, November 27, 2009 02:52 WIB

Jakarta (ANTARA News) - Firdaus Djaelani, chief executive of the Deposit Insurance Agency (LPS), said several investors from Asia were seriously considering to buy Bank Mutiara or former Bank Century.

"Several of them have shown serious interest and have come three times to enquire about Bank Mutiara," he said at a press conference.

LPS became Bank Mutiara`s sole majority shareholder after the agency provided the funds needed to prevent ailing Bank Century from collapsing. After the bailout, the bank was renamed Bank Mutiara.

However, Firdaus said, none of the interested investors had so far filed a letter of intent. "They are still talking. But I am optimistic the bank can be sold," he said.

The government has given LPS three years` time and the possibility of extending the period by another two years to sell the bank to recoup the bailout funds totalling Rp6.7 trillion.

"We will sell it for Rp6.7 trillion within five years but if we fail we will sell it for the best possible price," he said.

The president director of Bank Mutiara, Maryono, said he also believed the bank could be sold at the targeted price.

He assumed the bank`s net price would reach an average Rp250 billion per year and so, within five years, a total of Rp1.250 trillion would have been collected. "Since the LPS took it over, the bank`s net profit will not be spent on dividends," he said.

With the value of the bank`s assets recorded at around Rp500 billion based on four times their book value, Rp7 trillion would be a reasonable selling price for the bank, he said.

Some 99.996 percent of the bank`s shares are now held by the LPS with the rest or 0.004 percent belonging to the public and private parties.

"However, if the bank is sold to the holders of 0.004 percent of the shares, they cannot enjoy the proceeds. This is because the bank`s equity was negative when LPS took it over," he said.

Indonesia's Merukh raises stake in Newmont unit

Reuters, Fitri Wulandari, Mon Mar 30, 2009 9:14am EDT

JAKARTA, March 30 (Reuters) - One of Indonesia's leading mining executives, Yusuf Merukh, has lifted his stake in Newmont Mining Corp's (NEM.N) Indonesian unit to 27 percent from 20 percent, paying $427 million for the shares, he said on Monday.

The purchase by Merukh's privately owned company PT Pukuafu Indah is part of a divestment of shares in PT Newmont Nusa Tenggara (NNT), which operates the Batu Hijau copper and gold mine in eastern Indonesia.

Newmont and Sumitomo Corp (8053.T) own 45 percent and 35 percent respectively of Newmont Nusa Tenggara but under the terms of their mining contract must complete the sale of a 51 percent stake in the company to local investors by 2010.

A 20 percent stake has already been sold to PT Pukuafu Indah and Newmont has agreed to sell a 31 percent stake gradually by 2010.

Newmont also offered to sell a 7 percent stake, valued at $348 million, to the Indonesian government this year, Merukh said.

Merukh's comments came as various shareholders await an announcement by an arbitration court in Indonesia over a previous share sale by Newmont in its unit.

Newmont began offering to sell its shares in NNT in 2006, initially offering 3 percent for $109 million. The following year it offered 7 percent worth $282 million. Indonesia's finance ministry was given the right of first refusal.

However, the government said the share sales could not go ahead because Newmont had missed a deadline to complete the deals.

In February 2008, the energy ministry threatened to annul NNT's contract of work, saying it had not sold its shares in time to local investors. But Newmont said it had sold a 2 percent stake to the Sumbawa local government in January 2008.

Both the government and Newmont filed cases against each other in the arbitration court in March 2008 after talks between both parties on the divestment collapsed. The arbitration court is due to announce its ruling on March 31.

The Newmont case has attracted considerable attention from foreign investors and international mining firms, providing yet another example of a conflict between the Indonesian government and a foreign party over ownership of the country's resources.

Indonesia hosts international resource firms including Freeport-McMoran Copper & Gold (FCX.N) but has struggled to get big new foreign investment in recent years, largely due to uncertainty over the mining laws. (Editing by Sara Webb and David Holmes)

Govt to merge three geothermal companies

The Jakarta Post, Jakarta | Wed, 03/25/2009 6:08 PM

The government is weighing the possibility of merging three geothermal companies, PT PLN Geothermal, PT Pertamina Geothermal Energy, and National Gas Company (PGN), a State Ministry for State Enterprises official said Wednesday.

"A team to oversee the merge has already been formed and is currently in full operation," Deputy for Mining, Strategic Industry, Energy and Telecommunication at the State Ministry for State Enterprises Sahal Lumban Gaol said, as quoted by Antara news.

According to Gaol, the three companies share a vision for the merge, though have yet to decide whether it would take place in the form of a complete merger or form a holding company.

"What's important...they agree that BUMN geothermal development is very important in the effort of finding alternative sources of energy," he said.

He added that Indonesia's relatively untapped geothermal industry carries immense potential for development, such as the Patuha and Dieng mining fields.

"Indonesia's geothermal potential is the best in the world," Gaol argued.

State Minister of State Enterprise Sofyan Djalil had approved of the merge plan for reasons of efficiency.

"The presence of state-owned geothermal sector carries the potential to ease government energy subsidy that can be transferred elsewhere," Djalil said.

He also said that geothermal, when compared with other sources of energy, was advantageous for its renewable nature. (amr)

Here's how we do it

The Jakarta Post, Tue, 03/24/2009 12:55 PM

Australia and New Zealand Banking Group Ltd. (ANZ) CEO for Asia Pacific Alex Thursby presents the bank's new global brand in Jakarta on Monday. Thursby said ANZ was aiming to be the fourth largest bank in Indonesia by assets by 2012 through its stakes at Panin Bank and ANZ Panin Bank.

"Our retail banking and institutional banking at ANZ Panin has a very clear direction... We own 38 percent of Panin, and as you know they are the *number* seven bank in Indonesia. We believe the two, which go in harmony, will allow us to get to our strategic intent of being, as a banking group, the *number* four player in Indonesia," he said.

ANZ Panin is 85 percent owned by ANZ and 15 percent owned by Panin. ANZ also owns 38.3 percent of Panin.

Thursby also said although bad loans globally would rise this year, Indonesia was now in good position as companies here were "very much underleveraged".

JP/Aditya Suharmoko

Wika, Jasa Marga to Boost MNA Stake

The Jakarta Globe, Yohanes Obor, March 19, 2009

In an effort to get the stalled trans-Java toll road project back on track, state-owned construction company PT Wijaya Tbk, or Wika, announced on Tuesday that it planned to join PT Jasa Marga Tbk in increasing its stake in road contractor PT Marga Nujyasumo Agung, or MNA.

The firm has stumbled in its bid in to build the Rp 3.22 trillion ($270.5 million) Surabaya-Mojokerto portion of the road.

Jasa Marga said in February that it would start buying up concessionaires on the project, which will stretch from Jakarta’s Tanjung Priok Port to Tanjung Perak Port in Surabaya, East Java Province. The road had been expected to be operational in early 2009.

Government planners set aside Rp 2.8 trillion for land acquisition in 2007 and 2008 for the highway, which the Danareksa Research Institute said would increase the country’s gross domestic product by 0.2 percent for every 100 kilometers completed, adding more than 750,000 jobs to the economy.

MNA, which previously was majority owned by the Moeladi family, was scheduled to begin construction on its 36 kilometers of highway linking Surabaya and Mojokerto, also in East Java, in 2011, but was unable to start the project after investors pulled out.

Wika has now said it expected to buy 20 percent of MNA in two tranches, according to Imam Sudiyono, Wika’s corporate secretary. In the first, the company has signed a sale-and-purchase agreement with the Moeladi family buying 33.3 million shares worth Rp 33.3 billion and 20 million treasury stocks worth Rp 20 billion. It will then buy another 20 million shares worth Rp 20 billion from the Moeladi’s and 46.7 million shares worth Rp 46.7 billion from company’s treasury stocks in April, Imam said.

Jasa Marga in January swelled its stake in MNA to 55 percent, Imam said, leaving the Moeladi’s with 25 percent of the company. Jasa Marga also plans to expand its ownership in three local firms that received concessions for Jakarta’s outer ring road projects, along with one holding a concession on the East Java toll route, for Rp 1.74 trillion.

The firm said it would finance its share purchases through internal cash and the proceeds of its initial public offering, as well as tapping the government’s revolving fund for land acquisition.

Thai Ratchaburi may take Indonesia power plant stake

Reuters, Thu Mar 19, 2009 2:58am EDT

BANGKOK, March 19 (Reuters) - Thailand's Ratchaburi Electricity Generating Holding RATC.BK said on Thursday it was in discussions with PT Truba Alam Manunggal Engineering Tbk about investing in a power plant in Indonesia.

Ratchaburi, Thailand's largest private power producer, expected to take about 40 percent in the coal-fired power plant, which had an estimated cost of $274.3 million, the Thai firm said in a statement.

The 270-megawatt power plant is located in Kuala Tanjung and commercial operations are expected to begin in 2010.

Apart from Indonesia, Ratchaburi has said it is looking for opportunities to invest in Laos and Vietnam as part of its attempt to boost capacity.

Ratchaburi is 45 percent owned by state-run Electricity Generating Authority of Thailand and 15 percent owned by Banpu (BANP.BK), the country's biggest coal miner.

At the midday break, Ratchaburi shares were up 0.65 percent at 38.75 baht, while the overall market was 0.94 percent higher. (Reporting by Khettiya Jittapong; Editing by Alan Raybould)

Semen Gresik may acquire a regional rival

Ika Krismantari, THE JAKARTA POST, JAKARTA | Wed, 03/18/2009 10:38 AM

PT Semen Gresik, the country’s largest cement maker, may acquire a 40 percent stake in a regional rival as domestic demand slows and the global economic recession makes assets cheaper.

“At the moment, prices are cheap. We don’t want to lose momentum,” president director Dwi Soetjipto said on Tuesday, adding the company has appointed Credit Suisse Group as acquisition plan adviser.

The targets for this expansion plans are cement companies located in the Philippines, Vietnam and Malaysia now producing cement at a cost of between US$80 to $90 per metric ton, Dwi added.

Highlighting a decline in global prices of assets, Bloomberg reported that the MSCI AC Asia Pacific Excluding Japan Materials Index, which tracks 65 makers of basic materials including cement and metals, has fallen 52 percent in the past year.

The acquisition plan, according to Dwi, has forced the company to again revise its capital expenditure plan budget to be spent between 2009 and 2012, which had been previously revised down to $1.3 billion, from $1.6 billion earlier.

“We are again reviewing our financial plan and the change can be upward as we try to accommodate the acquisition plan in the budget,” he said, without mentioning figures.

Semen Gresik vice president Heru Adiningrat said the company planned to hold a shareholder meeting in May to seek approval for the plan.

So far, Heru added, the company has selected six firms as possible acquisition targets.

Semen Gresik’s acquisition plan aims to help it retain its revenue growth amidst an expected decline in growth of local demand this year.

Cement producers expect domestic sales to increase by 3 percent this year, lower than about 12 percent growth last year, with some growth continuing thanks in part, according to Dwi, to the government’s Rp 71.3 trillion (around US$6.1 billion) economic stimulus plan.

Semen Gresik may produce 19 million tons of cement this year, around 4 percent higher than last year. It currently is the leader in the country’s cement market with a 44 percent market share.

Dwi said that the company targeted to export 1.5 million tons of cement this year, up from 1 million tons in 2008. Semen Gresik exports its products to South Asia, Africa and Middle Eastern countries.

“There’s room for an increase in domestic sales due to the stimulus package,” Dwi said.

“If domestic demand weakens, we’ll boost exports, but if that fails, we’ll reduce capacity.”

During the press conference, the company also announced a 42 percent increase in net profits last year from a year earlier, to Rp 2.52 trillion from Rp 1.78 trillion, as sales rose, facilitating growth in profits.

It sold 17.66 million tons in 2008, up from 16.9 million ton in 2007.

The publicly listed company is 51.09 percent owned by the government, 24.01 percent by Blue Valley Holdings — a subsidiary of business conglomerate Rajawali Group — and 24.9 percent by the investing public.

Kalimantan Gold in India talks on Indonesian coal

Reuters, Mon Mar 16, 2009 7:39am EDT  

JAKARTA, March 16 (Reuters) - Canadian mining firm Kalimantan Gold Corp. is in talks with an Indian power plant on equity participation and a supply deal in a coal project in Indonesia's East Kalimantan, a company official said on Monday. 

Kalimantan Gold (KLG.V), a junior mining firm listed on Canada's TSX Venture Exchange and the AIM Exchange, said in November last year it had signed an option with a local firm PT Indobara Pratama to bring its coal deposits into production and acquire up to an 80 percent stake. 

The firm has an exclusive 90-day option on due diligence as well as for a drilling programme during this period, Kalimantan Gold said in its statement. 

PT Indobara owns a coal mine in East Kalimantan which has potential deposits of between 55-60 million tonnes of 5,400 kcal/kg of coal, Kalimantan Gold said in December. 

"We are inviting them (the Indian power firm) because for this type of coal you need long term and certainty. It's not the type of coal you can sell for spot market," said Mansur Geiger, Kalimantan Gold's vice president for exploration. 

"They will own shares and they will be responsible for the coal off-take," Geiger told reporters, adding the mine is expected to start commercial production in September. 

He did not name the Indian power plant or give the number of shares it might take up in the project. 

The coal mine is expected to produce 1 million tonnes in the first year, gradually increasing to 5 million tonnes within 4-5 years, he said. 

Indonesia' energy ministry expects the country to produce about 230 million tonnes of coal this year, unchanged from 2008 on expected slowing demand. 

But industry officials said the country's coal output may reach 250-260 million tonnes as coal consumption by India and China would help shore up demand.[ID:nDEL409393] 

India's demand for coal is growing by around 8-9 percent a year, outpacing production that is growing by 6 percent as the power sector has not been as badly hit by the credit crunch. 

The government expects Indonesia's coal output to increase to 250 million tonnes in 2010 and 321 million tonnes by 2015. 

(Reporting by Fitri Wulandari; Editing by Ed Davies)

Acquisition Sun Life, CIMB team up to form joint venture

The Jakarta Post, JAKARTA | Tue, 03/17/2009 10:49 AM  

PT Sun Life Financial Indonesia, the local unit of Canadian insurance giant Sun Life, will spend US$22.5 million acquiring a 49 percent stake in the local unit of Malaysian conglomerate CIMB Group to further tap into Indonesia’s highly potential insurance sector. 

Under the transaction agreement, the two giants will then turn CIMB unit PT Commerce International into a new joint venture called CIMB Sun Life. 

“In terms of bancassurance potential in Indonesia, we believe it’s huge; bancassurance penetration has gone from a very low figure six years ago to a very significant portion of the market today, and we believe that will continue to grow,” Sun Life Indonesia president director Chris Lossin said Monday. 

He added that over the period of five years, CIMB Sun Life would generate new premiums of around Rp 1 trillion ($84 million) and take about 5 percent of the country’s market share. 

“The key point is that the vast majority of Indonesian insurance consumers still do not have insurance coverage, and many of them prefer to buy insurance through banks; we find it a very interesting opportunity,” he said. 

He added CIMB Sun Life would focus on distributing insurance products through CIMB Niaga customers. CIMB Niaga has 650 branches equipped and around 4,000 employees. 

CIMB Sun Life will operate separately from Sun Life Financial Indonesia, which will continue to focus on delivering lifetime financial security for its customers. 

Dato’ Sri Nazir Razak, CIMB Group chief executive, said the acquisition was worth $22.5 million.

“In the ownership structure of CIMB Sun Life after the transaction, 49 percent will be owned by Sun Life Financial, 3.76 percent will be owned by CIMB Niaga, and 47.2 will be owned by CIMB Group,” he said. 

He added that once the agreement was completed, there would be commitment from both parties to increase the capital of the joint venture to grow the business. 

Razak also said CIMB Sun Life was planned to be formally launched later this year. 

CIMB Niaga president director Arwin Rasyid said that under the agreement, Sun Life Financial would act as the insurance product manufacturer, while CIMB Niaga would sell the products. 

He added the marketing strategy for the new products would be achieved through cross-selling and bundling with CIMB Niaga’s existing products. 

“Insurance prospects are still good this year. Indonesia has an average 50 percent growth in the insurance market and will keep growing.” 

The Swiss Re Sigma Report shows the Indonesian insurance market recorded total premiums of $4.7 billion in 2007, or growth of 67 percent — the fastest in Asia. 

But Indonesia’s current insurance premiums only account for 1 percent of the country’s GDP.

CIMB Group is owned by Bumiputra-Commerce Holdings Bhd, which is listed on Bursa Malaysia with a market capitalization of some $6 billion. 

CIMB Group holds a controlling share ownership of 77.75 percent of Bank CIMB Niaga. 

CIMB Niaga stems from the merger between Bank Niaga and Bank Lippo, owned indirectly by Malaysia-based Khazanah Nasional Berhad, which owns most shares of CIMB Group. (fmb)

Govt to merge Kimia Farma and Indofarma

The Jakarta Post  |  Fri, 03/13/2009 6:16 PM  

The government said Friday that it would merge state-owned drug makers PT Kimia Farma and PT Indofarma as a single company that produces pharmaceutical products. 

Deputy to State Minister for State Enterprises Muchayat said the ministry had assembled a team to implement the merger. 

“PT Mandiri Sekuritas has been chosen as the lead advisor in the merger,” Muchayat said as quoted by tempointeraktif.com on Friday. 

He added that the ministry was still looking for legal advisors, accountants and other experts to support the team. (and)