Dissenting opinions have again prevented the House of Representatives from approving the government’s proposal for an initial public offering (IPO) plan for state-owned cement maker PT Semen Baturaja.
The lawmakers from the House’s Commission XI on finance failed to reach a decision on Monday — during a meeting that was expected to produce a final decision — which was also attended by Finance Minister Agus Martowardojo, State-Owned Enterprises Minister Dahlan Iskan and Semen Baturaja president director Pamudji Rahardjo.
Edison Betaubun, a legislator from the Golkar Party, insisted that members of Commission XI must not take any decision at the end of the meeting, citing a lack of quorum. Only a handful of Commission XI members attended the meeting, which was presided over by the commission’s chairman, Emir Moeis, from the Indonesian Democratic Party of Struggle (PDI-P).
In the meeting, several lawmakers who opposed the plan questioned the government’s decision behind the IPO. Several feared that the IPO could lead to the company being controlled by foreign investors. Some suggested that state-owned PT Semen Indonesia take over Baturaja.
Muhammad Hatta from the National Mandate Party (PAN) said that the IPO would not make much difference for the cement maker’s future finances.
The other camp at the House supported the government’s IPO plan. Nusron Wahid of Golkar argued the shares sale was about more than fund raising. The IPO plan would bring Semen Baturaja’s standards on a par with the industry’s benchmark and even if foreign investors purchased the shares, the government would still have majority ownership of the company, he added.
Commenting on the lawmakers’ arguments, Dahlan said that if Baturaja as a state-owned company was to be sold to Semen Indonesia, the country’s largest cement producer, the funds would not go to Baturaja, but instead to the government. “Baturaja will not have the funds needed for its expansions,” he said.
The South Sumatra-based Baturaja plans to release 35 percent of its enlarged shares and reap at least Rp 1 trillion (US$103 million) from the IPO. It will use the funds to finance the construction of its new cement factory, with a capacity of 1.5 million tons, in South Sumatra.
The factory will need a total of Rp 2.5 trillion in investment and will also be funded from internal reserves of Rp 1 trillion and bank loans of Rp 500 billion.
Lawmakers have agreed to deliver their final say on the IPO within seven days.