Faisal Maliki Baskoro & Dion Bisara – Controversy generated during recent initial public offerings by state companies has not stopped the government's plans to list even more of its firms.
State cement maker Semen Baturaja secured approval from the government's privatization committee on Thursday, pushing it closer to a Rp 1 trillion ($114 million) IPO.
The government is optimistic it can sell stakes in up to 10 state-owned companies this year in a bid to fund their expansion while improving their performance and transparency.
State Enterprises Minister Mustafa Abubakar said Semen Baturaja should list this year, ahead of its scheduled debut in 2013. Approval by the House of Representatives is expected to come in the first half of this year.
"Semen Baturaja's IPO plan adds to the three companies that have already been decided to be divested this year. All four of these are in our program in 2011," Mustafa said on Thursday.
That optimism is despite contentious IPOs for air carrier Garuda Indonesia and steel maker Krakatau Steel. Krakatau's IPO was marred by reports that shares were kept low as a favor to lawmakers, who could sell them quickly at a steep profit, while Garuda's shares plunged 17 percent on their trading debut as the price was seen as too expensive.
After two controversial IPOs under Mustafa's leadership, Airlangga Hartarto, chairman of House Commission VI, which oversees state enterprises, said the House would not just provide a rubber stamp for Baturaja's IPO.
"In the current market conditions and after Krakatau Steel and Garuda's controversial IPOs, we have to look at Baturaja's business plan before giving the green light," Airlangga said. "Baturaja's size is relatively small in the industry. I'm not sure if the IPO will be attractive."
Lawmakers are still probing Krakatau's IPO because they claim the shares were offered at a low price to benefit certain parties, including the lawmakers themselves. The government is also evaluating Garuda's IPO, which was largely a flop as the main underwriters had to absorb almost half the offered shares.
The government plans to sell a 30 percent stake in Semen Baturaja in a bid to help fund the firm's expansion. The cement maker posted Rp 874 billion in revenue last year, up 7 percent from 2009, while profit rose 23.47 percent last year to Rp 220.81 billion.
Mustafa said other state companies to be privatized this year are textile firm Cambrics Primissima, paper maker Kertas Padalarang and construction company Sarana Karya.