"I can sympathize with the company`s management."
Jakarta (ANTARA News) - The management of state-owned cement company PT Semen Baturaja was disappointed with the House of Representatives (DPR) for not supporting its plans to conduct an initial public offering (IPO), according to a minister.

"Even though the management of PT Semen Baturaja was disappointed, I was not. But I can sympathize with the company`s management," State-owned Enterprise Minister Dahlan Iskan said here on Friday.

At a working meeting with the management of Baturaja on Thursday, the DPR`s Commission XI on financial affairs did not approve the state-owned cement company`s plan to issue an IPO during the first quarter of 2013.

"The management of Semen Baturaja was determined to go the IPO way because it had been planning to privatise the company since early last year," Dahlan explained.

He said the company would conduct the IPO in order to obtain funds for its expansion.

"The management wanted the IPO to be conducted soon because the IPO funds would be used to expand the company. We believe that by going the IPO way, the company would make progress," Dahlan noted.

Therefore, the minister had promised to make efforts to help the company realise its IPO plan.

It was reported earlier that the hearing with the House Commission XI lasted for seven hours on Thursday night, but no decision was reached with regard to the privatization plan of the state firm.

Commission XI Deputy Chairman Zulkieflimansyah said after closing the meeting that there were five factions which were in favour of the privatization plan.

"The five factions wanted that the road map to its privatization be developed by the Ministry of State-Owned Enterprises, but three other factions rejected the privatization plan," he explained.

However, PT Semen Baturaja will continue to work on its expansion plans.

The company will develop a new cement factory with an annual capacity of 1.5 billion tons.

Dahlan Iskan stated that the company would go ahead with its plan to develop the factory despite the rejection of its IPO proposal.

"However, I do not know whether the rejection of the IPO plan would delay the completion of the project," he said.

Dahlan noted that the company wanted to issue the IPO in order to expand its factory for supporting cement production.

"In essence, the IPO is not intended to pay debts but to expand its business," he pointed out.

This year, the company has set itself the target of producing 1,253 million tons of cement, with sales of 1,109 million tons. Last year, the company had sold 1,250 million tons at Rp588 billion.

PT Semen Batu Baraja had expected to raise Rp1 trillion through an IPO.
(Uu.A014/INE/KR-BSR/B003)

Editor: Priyambodo RH
Copyright © ANTARA 2012