Govt may prefer private placement for Timah?s divestment

The office of the state minister for state enterprises may change the second phase of state-owned tin miner PT Timah Tbk?s privatization scheme from secondary offering to private placement, Bisnis Indonesia newspaper reported in its Wednesday edition.

?Government sees private placement is more relevant, which do not need much time, where as the secondary offering needs longer time,? a source revealed to the Bisnis on Tuesday.

According to the source, the state miner?s divestment is scheduled to finish in the first semester of this year. In this connection, the office of the state minister for state enterprises has invited 12 securities companies to be selected as under writers for the sale of Timah shares. However, only nine companies ? PT Danareksa Sekuritas, PT Bahana Securities, PT Trimegah Securities, PT Mandiri Sekuritas, PT BNI Securities, Alpha Sekuritas, PT Bhakti Capital, PT Ciptadana Sekuritas and PT Indopremier Securities?attended a meeting with the government on Tuesday in Jakarta.

The source said the above companies were told to submit their proposals before Friday.

Separately, Timah?s president director Thobrani Alwi said his company is not yet aware of the change in the privatization program. So far, we stick to the earlier scheme of secondary offering. If there is any change in the program, we will support it.

?We will just support and it will be up to the government as a (majority) shareholder,? Thobrani said.

The government has initially planned to sell 10-14 percent of shares of Timah through a secondary offering this year.

With the improvement in global tin prices, the office of the state minister for state enterprises thinks that the year 2004 will be the right time to sell its stake in Timah.

In 2002, government also planned a secondary offering for Timah shares , but it was postponed due to weak global tin prices.

Timah had said its net profit would soar sevenfold to Rp80 billion for the 2003 financial year from Rp11.28 billion in 2002 on higher tin prices and sales.

According to Timah, present tin prices are trading at US$6,500 per ton, up from $3,620 per ton in February 2002.

The company also plans to build a new smelter this year to help boost production.

Timah currently operates a major tin smelter on Bangka Island with production capacity of 47,000 metric tons per year.

Timah's tin production this year is expected to be around 42,000 tons, barely unchanged from last year's target. (*)