Indonesia Ready to Take Over Inalum

Selasa, 25 Juni 2013 | 08:57

The Indonesian government is ready to take over the entire ownership of PT Indonesia Asahan Aluminum (Inalum) on 1 November 2013 from a consortium, namely Nippon Asahan Aluminum (NAA)."On November 1, Inalum will be fully owned by Indonesia," Industry Minister MS Hidayat said after attending the inauguration of the Constitutional Court Judge at the Presidential Palace Complex, Jakarta, Monday (6/24/2013).

However, Hidayat claimed that he cannot disclose the purchase price of Inalum because the two parties, Government of Indonesia and NAA, are still negotiating. However, the Finance Minister has set up a fund worth IDR7 trillion for the acquisition.

"The value is IDR7 trillion as what has been agreed by the House. If it is not enough, then we will ask for more. But if the budget is exceeding the price, then we will return it. IDR7 trillion is sufficient," he said.

Currently, the government is still exploring the process of transfer of ownership of the company, especially technical ones. "We want the takeover took place with really good in terms of legal and commercial," said Hidayat.

The government of Indonesia has a 41.13% stake in PT Inalum, while the remaining 58.87% is owned by a consortium of NAA.

This consortium consists of Japan Bank for International Cooperation (JBIC) as a representative of Japanese government and 12 private Japanese companies. Cooperation contract of PT Inalum’s management held by Japan will end in October this year.

Small Team

Hidayat said a small team formed by the government for the acquisition of 100% shares of Inalum continues to accelerate the negotiation. Inalum will pursue management contract which will expire on October 31, 2013, the government will form a small team for an intensive negotiation.

"We almost hold meeting every week. Later on July 3, we will meet again to discuss it. The meeting is usually conducted in Japan or Singapore," he said.

According to him, a small team, which consists of ten representatives of relevant ministries and several lawyers, needs to be intensified before the plenary meeting.

Some ministries have prepared for this, such as the Ministry of Public Works which has been talking about water governance after the takeover.

"The Ministry of Justice and Human Rights has also set up legal papers, and then there is also the Ministry of the Internal Affairs, as well as local government which is also participating in this matter. All parties will be involved, "he added.

Government of North Sumatra and 10 regencies/cities in the Lake Toba region which has formed joint venture would cooperate with other companies to form a consortium to take part in Inalum shares ownership.

Head of North Sumatra Regional Development and Planning (Bappeda) Riadil A Lubis said that after the establishment of the regional-owned enterprise, Bappeda would review the percentage of shares to be taken over.

According to him, this consortium was formed as an early preparation so that after the contract with Japan expired and Inalum shares have already owned by Indonesian, the regional has had a professional business entity prepared to manage Inalum.

“At the beginning, there would be 10% to 15% shares to be taken over, but it’s still being reviewed. The funding could be from each county/city while seeking other partners to prepare the funding,” he said.

Book Value

On the other hand, Hidayat said some disagreements with NAA consortium as the party that represents Japan. "It is natural that there are still differences of opinion about the price, goods value determination, as well as the decision on book value before and after evaluation."

Hidayat had once explained that the negotiation has entered the final to decide the book value of the North Sumatera-based company since there’s still a valuation difference worth US$100 million between the Financial and Development Supervisory Agency and the auditor appointed by NAA Japan.

For the electricity sector, the ministry would cooperate with PT PLN (Persero) because the government would directly receive the shares. "Inalum would be taken over 100%."

PLN President Director Nur Pamudji said that until now there has been no discussion with the government related to PLN involvement. "There has been no discussion,” he said via text message.

Additionally, Hidayat said that the ministry hasn’t talked about the involvement of PT Aneka Tambang.

Director General of the Manufacturing Industry Basis for the Ministry of Industry Panggah Susanto said if Inalum has been successfully taken 100% by Indonesia, Japan is still very likely to receive supply on Inalum’s product. "It could be, that will become B to B [business to business]," he said.

However, Hidayat said that the production would be prioritized for the country.

State Enterprises Minister Dahlan Iskan previously confirmed that the company name will not change since the transaction is only a change in status. (Photo: Reuters) (aph)

by Anggi Oktarinda, Hadijah Alaydrus, Riendy Astria, Aprianto Cahyo Nugroho