The Jakarta Post, Jakarta | Business | Fri, October 18 2013, 12:37 PM
The Indonesian government will go ahead with its plan to take over North Sumatra-based aluminum producer PT Indonesian Asahan Aluminium (Inalum), despite an arbitration threat from Japanese shareholders, Coordinating Minister for the Economy Hatta Rajasa said.
According to Hatta, the government had yet to decide whether it would allow local administrations to acquire a stake in Inalum, which would become a state-owned company after the contract allowing a Japanese consortium to manage and operate the company expired on Oct. 31.
“It has been decided that Inalum will officially become a state-owned company on Nov. 1,” Hatta said after a meeting at his office on Thursday.
The meeting, which focused on PT Inalum’s acquisition, was attended by the State-Owned Enterprises Minister Dahlan Iskan, the Finance Minister Chatib Basri and the Industry Minister MS Hidayat.
Hatta acknowledged that the takeover plan would occur, although the government had still not reached an agreement with Japanese consortium Nippon Asahan Aluminum (NAA) on the value of PT Inalum’s assets.
According to an audit by the state auditor Development and Finance Controller (BPKP), the value of Inalum’s total assets reached US$424 million. According to the Japanese consortium’s calculations, however, the company’s assets amounted to $626 million. Minister of Industry MS Hidayat said the government would insist on using BPKP’s calculation when it took over NAA’s shares in Inalum.
The Japanese consortium, which owns an almost 60 percent stake in Inalum, said earlier that it would go to an international arbiter if the Indonesian government refused to use its appraisal of the firm’s total assets.
Hidayat added that the government would also invite the North Sumatra administration to be involved in a future meeting with NAA because the company was located in the province.
But he said that the government had not decided whether the provincial administration would take a stake in the company.
Previously, local administrations from 10 regencies and cities located near PT Inalum’s industrial complex said they had reached an agreement to join forces to obtain a portion of Inalum’s shares after the central government had completed its takeover of the company.
Inalum, which was established in 1976, is 41.12 percent owned by the Indonesian government and 58.88 percent owned by NAA, a consortium of 12 Japanese companies, including Sumitomo Chemical Co. Ltd., Sumitomo Shoji Kaisha Ltd., Mitsui Aluminium Co. Ltd. and Mitsubishi Corporation. (tam)