RESERVING STOCK FOR EMPLOYESS STATE-OWNED COMPANIES READY TO GO PUBLIC

There was nothing wrong about State Owned Companies [BUMN] failing to meet target this year, but problem was that many BUMNs wished to be registered as a public company but quite often were obstacle by political factor. “Ideally politicians needed not to interfere with IPO plans, all they have to do is approve, and leave the rest to the company’s management.”

               

Such as the remark of economic observer Avilliani, responding to the registration of their shares of Baturaja Cement Corporation to Business News on Friday [27/6].

               

According to Avilliani, many BUMN companies wished to run IPO because it was profitable and they needed money for financing infra-structure, they did not have to pay interest if the company managed to raise capital from IPO. The case was different if the company sought cpital from bank’s credit.

               

Now was the right moment for BUMN to go public to benefit from the inflow of foreign capital Indonesia. The big inflow of capital happened as China and India had overheating in investment. “The foreign capital entering the stockmarket through IPO of BUMN could be invested in the real sector” Avililiani was quoted a saying.

               

Other benefit was that BUMN companies which had become a public would be free of intervention form anywhere. Political interest would be hard to interfere companies already being part of the stockmarket, as corporate acts must report to the Coordinating Board of Investment. The company would also be constantly monitored by minority shareholders. The company would be encouraged to be more efficient, accountable and transparent to convince monitory shareholders.

               

In view of the said benefits, BUMN were in fact eager to run IPO. But again, many circles held back BUMN from entering the stockmarket. Political interest and long process were the main obstacles. That more BUMN might go public next year, Avilliani suggested BUMN to ignore political uproars. He believed that the Ministry of BUMN had possessed a list of companies to go public next year. “Just move onward, don’t be afraid as long as you don’t break the rule” he pled.

SMBR Released 2.33 Billion Shares

               

PT Semen Baturaja Tbk [SMBR] had officially run IPO at the Indonesia Security Exchange [BEI] on Friday [28/6]. This State Owned Company [BUMJN] released 2.33 million shares or 213.76% of paid up capital after IPO. Of that amount 19.16 million shares or 0.82% of total shares release were offered for the Employee Stock Allocation Program [ESA].

               

The President of PT Semen Baturaja, Pamuji Rahardjo stated in his speech at BEI that 162.32 million share or 162.32 million shares or 1.65% of total capital was placed and fully paid up after IPO, used for the execution of management program and Employee Stock Option Plan [MESOP] SMBR pocketed cash of Rp1.3 trillion of the total shares released by the company. Allocated usable fund from IPO around 25% was used for land procurement and development. Around 70% would be used for buying machines and main equipments.

               

The rest, around 5% would be used for buying electronic equipments and automatization, machines and design. Acting as emission executor undertaker for IPO of PT Semen Baturaja was PT Bahan Securities, PT Danareksa Sekuritas and PT Mandiri Sekuritas.

               

He further remarked that around 70% would be allocated for buying machines and main equipments, around 25% would be used for land procurement and development, and the remaining 5% for investment in electronic equipments, automatization and design and engineering expenses.

               

The director for Evaluation of BEI, Hoesen rated that the increased price of SMBR shares during IPO at BEI signaled investor’s optimism of BUMN. “ The entry of BUMN was expected to increase optimism among investors; not just that, other companies were also expected to contribute to the growth of the domestic capital market industry” Hoesen remarked.

               

Hoesen remarked that the development of infra-structure at home increased positive sentiment for investors to accumulate share of companies which supported infra-structure development. This year 2013, PT Baturaja was the only BUMN which ran IPO, i.e. venturing at the stockmarket. All in all the number of BUMN companies enlisted at BEI was posted at 20 companies.

        

The Biggest Market Capitalization at the Stockmarket

               

The Ministry of BUMN disclosed that the 6 BUMN listed at BEI, had capitalization value of 25.7% of total market cap circulated in the stockmarkets in Indonesia. Deputy Executive of Restructurization and privatization of BUMN Wahyu Hidayat stated that capitalization of the six BUMN companies was notably high. Moreover to consider that the 6 emitents as one of the top ten emitents having high capitalization at the stockmarket.

               

“There are 10 of the biggest, 6 BUMN and 4 private companies. The 6 BUMN had total capitalization of 25.7% that is really remarkable” Wahyu said.

               

But he did not specify the 6 emitents in detail. He pointed out as an example PT Semen Baturaja Tbk which was the 20^th BUMN and had run IPO at the stockmarket. It was expected there would be other BUMN companies which followed Baturaja’s step to perform at the stock hall. Semen Baturaja could be expected to be good player at international level whereby to compete in the scope of the Indonesian stockmarket.

               

He stated that BUMN could be a big player in the national stockmarket or even at international level. Provided they were willing to work hard to driven other BUMN companies to progress. (SS) 

Business News - July 05,2013