Idris Gassing died in car accident

Maj General M. Idris Gassing, former commander of Bukit Barisan Military Area, died in a car accident on Friday. Gassing's last position was inspector general of ministry of information & communication. Gassing drove the car. The accident was at KM 101 of Cikampek-Padalarang turnpike.

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China's energy interests in Indonesia

The energy hungry China has intensified its overseas energy investment. No secret! Petrochina, CNOOC, and Sinopec are currently the key players in Indonesian oil and gas business. Who are their local partners?

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Sukrisno, new Bukit Asam CEO

Sukrisno has been appointed new president director of state-owned mining company PT Tambang Batubara Bukit Asam Tbk. Sukrisno was production director of the company. Other directors are Dono Boestami (finance), Tiendas Mangeka (marketing), Milawarma (production/operation), Heri Supriynto (business development), and Mahbub Iskandar (human resources).

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Happy New Year Everybody!

Dear readers,
In the last few days I got tons of emails with compliments on what we did in this humble blog. Thank You so much. But I'm just a human being with lots of mistakes. I'm sorry if my articles have misled some of you, but I didn't have such intention. I just want to share my diary. As I mentioned in the previous post, in 2007 the blog will have new features like some of you might have noticed and it would still a free exchange on hot issues in the country. But for those of you who have interests in customized reports, in-depth analysis, and exclusive news you need to go to a paid service at yosef-ardi.com or contact me at yosef_ardi@yahoo.com. Wish you all the best and Happy New Year 2007!

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An Open Letter to President SBY

Dear Mr President,
Let me cite the first paragraph of John Maynard Keynes' letter to President Roosevelt back in Dec, 73 years ago with limited adaptation.
You have made yourself the Trustee for Indonesians who seek to mend the evils of our condition by reasoned experiment within the framework of the existing social system. If you fail, rational change will be gravely prejudiced throughout the world, leaving orthodoxy and revolution to fight it out. But if you succeed, new and bolder methods will be tried everywhere, and we may date the first chapter of a new economic era from your accession to office. This is a sufficient reason why I should venture to lay my reflections before you, though under the disadvantages of distance and partial knowledge.

I wrote this letter after reading your beautiful statements published by almost all newspapers today hightlighting your New Year's Resolution of being more decisive, firm, and direct. I noted the statement is not brand new because you've made similar statements before. Last time I read that was in August on your Independence Day speech. So, I'm surprised that some leading newspapers keep put your statement as their headlines today.
Frankly, I like to read positive statements, despite the fact that I'm a skeptical person, because I believe lot more people are not like me and they have good faith in you. Reading it over and over makes me bored though. But I deeply understand that you need to reiterate and trying to get people rally behind you once you really mean it.
I have limited access to what's going on between the inner circles in The State Palace and VP Palace. But there are people who tend to believe that you compromised too many only to make yourself feels good and hate to be hated. And there are people who believe that Mr Vice President has been more decisive in various important issues of the administration when you're expected to do so.
We're not in great depression like when Keynes wrote the letter to President Roosevelt. But with 10% people unemployed, I'm worried that we're heading to a big social problem in the future. So far, we're blessed with strong social fabric that keep these unemployed have their meals. Still, these young men/women need jobs to prevent them involved in any anti-social activities that will destroy the political & security stability you helped to build in the last few years.
You've started it right when on Thursday you talk on the importance of reviving infrastructure projects to boost the economic growth & create more jobs. You also talked about how much money Lapindo Brantas Inc should provide to compensate the losses of the mudflow disaster in Sidoarjo. The very same day you signed government regulation to inject fresh capital into ailing state-owned companies.
But we've heard too much already. Walk the talks!
You've spent few months overseas in 2006, visited countries in almost all continents. We need you to spend lesser time overseas in 2007 and make more decisions, direct and decisive as you promised, to attract investors. Indonesia has everything investors needed except the helpful bureaucracy, legal certainty, and win-win labour laws. Investors need no more beautifully crafted statements.

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Jasa Marga divests CMNP, Tutut's comeback ?

State-owned toll road operator PT Jasa Marga is leaving another toll road operator once controlled by Soeharto family, PT Citra Marga Nusaphala (CMNP) Tbk. The company is divesting its 17.79% shares (355 million units). Who is the buyer?

Jasa Marga is the single largest shareholder at CMNP followed by UBS AG (7.2%), Remington Gold Ltd (5.23%), and Mr Ievan Daniar Sumampouw (5.15%).
Early this month, Jasa Marga also divested 10% its shares in PT Citra Margatama Surabaya (CMS) to CMNP. CMS is building Surabaya Eastern Ring Road (SERR), a 12.7 km toll road with 35-year concession and investment of Rp1.39 trillion. CMNP controls 95% shares in the toll road to be commercially operated mid-2007.
The question, who is behind the buyer of Jasa Marga shares at CMNP?
Early this year, some newspapers disclosed a plan of Mrs Siti Hardiyanti Rukmana, eldest daughter of former president Soeharto, to regain control up to 55% shares of CMNP through a company named Crown Capital Global (CCG) with UBS' full support.
Under the scenario, CCG would collect up to 38% shares of various investors and then Jasa Marga's 17.79%.
In a letter to UBS AG dated December 19, 2005, Almington Assets Ltd (owned by Tutut's family) had pledged 11% shares of PT Bimantara Citra. And according to the latest list of Bimantara shareholders, UBS/Almington owns 10.85% shares but is not listed as controlling shareholder of Bimantara anymore.
Total value of Jasa Marga shares in CMNP is around Rp518.3 billion, while total value of UBS/Almington shares at Bimantara is around Rp1 trillion.
BTW, who is Ievan Daniar Sumampouw?

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Namicoh expand Indonesia facility

PT Namicoh Indonesia Component, a subsidiary of Namicoh Co Ltd, Japan, is expanding its automotive component production facility in EJIP Industrial Park, Karawang, West Java with additional investment of USD11 million.

Other Japanese manufacturers are also expanding their plants in Indonesia. PT Honda Precision Parts Manufacturing, for example, is working on expansion of engine valve plant with additional capacity of 7.5 million units/year at Indotasei Industrial Park, Karawang, West Java.
Aichi Forging Indonesia is investing USD1.8 million to boost production of rear axle, propeller shaft, front axle components.
Unfortunately, no significant new investors from Japan. The size of existing investors' expansion are also insignificant. We know why, but we do nothing to change that.

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Soros' Fidelity controls 6.03% PP Lonsum

Fidelity Investments owned by flamboyant financier George Soros has increased its ownership in plantation company PT PP London Sumatra (Lonsum) Tbk to 6.03% as of December 20, 2006. Fidelity bought additional shares at USD0.66-0.69/share in the last few weeks to make it substantial shareholder (more than 5%).

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Sri Mulyani's father passed away

Professor Satmoko, father of minister of finance Sri Mulyani Indrawati, passed away on Saturday at 79. He survided a wife, Professor Retnoningsih, 10 children and 25 grandchildren.

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Gloomy Christmas

Indeed it's a peaceful Christmas in the city. At least, no more bombs or threats. But it's gloomy Christmas when almost 200,000 people forced to leave their homes due to floods in Sumatra. It's sad that 77 people have been killed in Aceh alone and 20 people died in Mandailing Natal, North Sumatra. Similar sadness with the deadly floods in East Java late last year on our way to new year's eve and thousands of people who still leave homeless due to mudflow in Sidoarjo since May.

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Lembang 9 & Team 11: Who's Who, now & then

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Hartono Gunawan resigned from Unggul Indah

Hartono Gunawan has resigned as president commissioner of alkyl benzene producer PT Unggul Indah Cahya Tbk for undisclosed reason.

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Haryanto Budiman & Mandiri's mounts of bad debts

Haryanto T. Budiman has been appointed coordinator to settle bad debts at state-owned PT Bank Mandiri Tbk. It's in his hands the fate of Djajanti, Kiani Kertas, RGM, Great River etc. Who is he?

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Makbul replaces Adang as Deputy Police Chief

Makbul Padmanegara has been appointed as new deputy police chief, replacing Adang Daradjatun who will contest in Jakarta governor election 2007 under the banner of Prosperous Justice Party (PKS). I thought Jusuf Manggabarani, VP's relative, who would replace Adang. As for Adang, he has filed early retirement to focus on his bid for the governorship. He met president SBY last night, asking for blessing. "President said, go ahead!" But he was reluctant to claim that as a kind of support.

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Tata, front runner to control KPC-Arutmin

Tata, BHP, and Mitsubishi are competing to acquire 30% shares of KPC and Arutmin. But Tata is reportedly the strongest candidate. May be it's not USD1 billion. "It's way too expensive for 30% of both coal mining companies. It's a kind of prop-up share price," one analyst at local brokerage firm said. "But, it's depend on the side agreements, let say on coal off-take. It could USD1 billion if the buyer will have control over marketing or such off-take agreement," another analyst said.

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PPA offloads Texmaco loans

After repeated failures to get qualified investors, PT Perusahaan Pengelola Aset (PPA) is betting its luck in divesting almost Rp30 trillion debts of Texmaco Group. It's strange to divest assets when most people are on their way for long holidays. The debts are the single largest batch left after the closure of Indonesia Bank Restructuring Agency (IBRA) two-and-half years ago. Mirzan Mahathir, son of former Malaysia PM Mahathir Mohammad was among the early bidders when IBRA launched the Texmaco divestment few years back. Farallon Capital, the owner of BCA, once submitted few dollars bid. But all of them didn't match government's minimum requirements. Considering the group's assets & huge workforce, it's still worth-watching the bidders!

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Adios 2006: New Blogger 2007

We're going to leave 2006 behind and facing the new year 2007. There were memorable & deplorable events during the year. This blog, for example, recorded 1,200% growth in readership in the last 12 months. Thanks.
But I have to admit, lots of things that the blog have missed or overlooked. That's why I'm upgrading the blog to Beta Version (Blogger 2007) with better layout, security, and searching. The blog will have some new authors, journalists, analysts, & reporters who'll provide better quality of articles, analysis, & database. To get higher quality contents & unlimited access to database, readers would have to submit email address to yosef_ardi@yahoo.com. Those who submit emails will be registered as potential invited readers and might be given access after accepting certain rules.

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Bimantara divests Trans Javagas Pipeline

PT Bimantara Citra Tbk has divested all its shares in PT Trans Javagas Pipeline (TJP) to PT Kapital Usaha Sempurna, an unknown entity at undisclosed price.

TJP was established by Bimantara (49%), Tranaco Utama (28%), Adhiraksa Tama (5%), Pertamina Saving & Investment (10%), Bank Mandiri Pension Fund (3%), and PLN Pension Fund (5%).
TJP built the controversial 430 km gas pipeline in 1992 with USD440 million investment as a BOT project. Under the contract with Pertamina, the pipeline should be transfered to Pertamina by 2014.

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Khazanah vying for more toll projects

After acquiring majority (55%) shares of Cikampek-Palimanan toll road project from a consortium led by Saratoga Investama, Malaysia's Khazanah through its subsidiary PLUS, is likely to acquire other toll projects in Java.

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Ciliandra expand to biodiesel

Listed company PT Ciliandra Perkasa Tbk had secured license to build biodiesel plant in Dumai with US$30 million investment.

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Microsoft Licensing under Investigation

Indonesia's Business Competition Supervisory Committee (KPPU) has launched an investigation over a memorandum of understanding between Indonesia government and Microsoft Corporation regarding licensing/legalization of softwares in govt offices, newspapers reported today.

Five years ago, Office of Fair Trade (OFT) in UK launched similar investigation over Microsoft Licensing based on complaints from other software providers that such program would cost UK gov't more than USD2 billion in four years time.
Microsoft-Government MoU was signed last month prior to the arrival of US President George Bush. KPPU fears the MoU is a kind of monopoly, against the fair business principles. Under such situation, government as the party in the MoU should also be investigated because the MoU may provides exclusive right to Microsoft. While the MoU is different with binding agreement, ie. it might be cancelled or not implemented, government should have realized early on the impacts.
Initially, I thought it was a MoU with broad spectrum of software licensors as parties in a fight against piracy. If that's the case, government should have signed similar MoU with Microsoft's competitors, while purchasing should be through open tender still.
Microsoft's competitors are clearly upset with the MoU and launched the campaign to drop it. SBY's administration then should explain to public what's the benefit or potential liabilities of signing the MoU with Microsoft and the other guys.

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Antam refinancing

BCA & Bank Mandiri provide USD121 million to refinance PT Aneka Tambang (Antam) Tbk's bond issued in 2003. Antam issued USD200 million bond in 2003 to finance its FeNi III project. The new facility bears interest of SIBOR+1.5% (6.9%) with maturity in five years. BCA provides USD71 million and Mandiri at USD50 million.

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Cabinet reshuffle preview

What's the urgency of a cabinet reshuffle if the leaders (President & VP) can't agree early on about their future, especially what kind of arrangement for 2009 election?

"Well, our real problem is the conflict betweeen the inner circles of both President & VP. Level of trust has been eroded in the past two years. President's inner circle suspicious about the VP and vice versa. This is not healthy at all, and a cabinet reshuffle would useless in such situation," one political analyst said.
Such resolution will work only if both leaders agree to run as a team in 2009, right? What if they decide to compete?
"That's gonna be disaster," he said.
Despite the skepticism, rumors about cabinet reshuffle have been intensified in the political circle. MSOE Sugiharto, for example, is rumored to be replaced by Sofyan Djalil (the communication minister). This is not new. Sofyan was member of Lembang Nine, success team for VP Kalla. Other name mentioned is...

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Latinusa IPO next year

PT Latinusa, a subsidiary of state-owned steel producer PT Krakatau Steel, is scheduled for IPO to raise Rp300 billion next year. Latinusa is a tin plate producer with installed capacity of 130,000 t/y. The money raised from IPO would be used to expand tin plate capacity to 160,000 t/y.

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Star Energy into Barito Pacific await Bapepam clearance

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Indonesia in 2007: Politic & Security Outlook

Jakarta gubernatorial race will be one of the most interesting political event next year. Meanwhile political maneuver for East Java governor election in 2008 will also intensify by the end of next year. How about possible cabinet reshuffle in March?

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Wiranto to declare new party

Gen (ret) Wiranto, who lost the 2004 president election, is scheduled to announce the establishment of new political party, tentatively called Partai Hati Nurani Rakyat (Hanura) with former high-ranking military officers, Jawa Pos reported.

Founding members of the new party are, among others: Fuad Bawazier (former finance minister under Soeharto regime), Subagyo HS (former army chief of staff), Fachroel Rozy (former deputy army commander), Suaedi Marasabesi, Elsa Syarief (lawyer for Tommy Soeharto), Bern K. Sondakh (former Navy chief of staff), etc.

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Gunawan Jusuf & The Sugar Trap

We're not talking about Gunawan Jusuf's sugar addiction. We're talking about how the investment banker is trapped in the business he's not familiar with and can't get out of it!

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John Karamoy, commissioner for Petrosea

PT Petrosea Tbk has appointed John Sarad Karamoy as its new independent commissioner. Mr Karamoy, 70, was president commissioner of PT Medco Energy International Tbk in the period of 2001-2006.

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How Japan outsmart China in Indonesia's electricity business

"You may think that China swept most of new power generating projects in Indonesia. But don't ever underestimate the Japanese. They managed to block China with the postponement of IPP projects and at the same time ask Mitsui and Sumitomo to expand their existing facilities in Paiton and Tanjung Jati B respectively so there will be no more rooms for new IPPs in Java," one China-backed investor said over the weekend. But how they did it?

"Well, first of all, Japan use ADB to lobby government to conduct a study on IPPs first before proceeding with the bidding. The study would take one year at least. Government agreed to postpone the IPPs and only proceed the 10,000 MW crash program. In the meantime, Japan asked Mitsui & Sumitomo to expand their existing power plants," he explained.

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Congrats to fellow journalists

Congratulations! For all the winners of Adiwarta Sampoerna, journalistic award sponsored by PT HM Sampoerna Tbk, the largest cigarette producer. Four journalists from Tempo win the awards for various categories. That's awesome. I know two of them, Metta Dharmasaputra (my colleague when he worked for Bisnis Indonesia) and Heri Susanto (great economic writer). While I don't know the selection criteria, I believe these guys have good integrity. I could only say all the best, don't let the smoke gets in your eyes, and keep on good journalism!

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21 Legislators visit US

Members of The House Commission VI (industry affairs), 21 legislators, from almost all political parties will be in Washington DC, United States early next week. They're consisted of 3 legislators from each of Golkar, PDI-P, and Partai Demokrat; 2 from each of PAN, PPP, and PKB; one each from PKS, PDS etc. Johny Alen Marbun (Demokrat), Azwir Dainytara (Golkar), Zulkifli Hasan (PAN) are among the legislators listed in the trip.
They're expected to talk on pending legislations like tax, customs, & investments +++ Christmas Shopping?

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PDI-P & Jakarta gubernatorial race

PDI-P led by former president Megawati Soekarnoputri has started the selection of candidate who will run under its banner for Jakarta gubernatorial race next year. Five candidates are competing for the spot. The election is important for the party as benchmark for its chance in 2009 elections.

The candidates are: (Read my previous articles about them)
1) Agum Gumelar
2) Bibit Waluyo
3) Faisal Basri
4) Fauzi Bowo
5) Sarwono Kusumaatmadja
Some of these names also approached other parties like president SBY's Partai Demokrat. Agum claimed PAN and Demokrat are supporting his candidacy. Meanwhile Faisal Basri had also approached PKB, PAN and PDS. PKB's patron leader, former president Abdurrahman Wahid, is said to support two candidates: Faisal Basri & Sarwono Kusumaatmadja. But later on PKB endorsed popular actor Rano Karno.

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PGN divestment closed at Rp11,350, behind the story

MSOE Sugiharto had finally decided to sell 185 million shares of PT PGN Tbk at Rp11,350, slightly above majority of submission at Rp11,300. As a result, the so-called Malaysia investor's offer at Rp12,000 dropped. What's up?

Bookbuilders (Danareksa, Bahana & Credit Suisse) had apparently met the 'investor' from Malaysia who wrote a letter to minister Sugiharto that he could buy PGN shares at Rp12,000 with closing date of transaction on December 22.
"But when we confronted him with some questions, he sais just ignore his letter to the minister and let's talk. He claimed that he has the money, but payment should be extended to two months," one investment banker involved in the transaction said.
The Malaysia investor has close friend HL, who is also the confidante of minister Sugiharto.
"Well, it looks good, but with the potential increase in share price in two months, you could easily suspect of something if you receive such offer," he further said.
But the Malaysian denied that. "The truth, brokerage firms hired by government asked as to put on the table last night at the amount of USD247 million while the mechanism is T+3," representative of the Malaysian I met this morning said.
"We have no connection with HL. We have direct relation with the minister himself," he said.
"I'm not surprised if later on you'll find Credit Suisse take all the benefits of this transaction. We told them that we have OSK behind us to support, not CIMB nor PNM, but they just didn't care," he complained.
When I asked him why not bought the shares in the market at cheaper price, he said, " because we know government will divest 5.31% shares and then we sent the offering letter last Thursday."
It means this guy got information from the ministry prior to the bookbuilding. The question, why the Malaysian guy didn't submit offer to bookbuilders?
"My analysis, Sugiharto's connection like AS mounts pressure like...see, Jamsostek and Malaysia's PNB are behind this investor, so you better entertain them. But if the guy is a qualified investor, he should have submitted the offer to bookbuilders, not to Sugiharto," an analyst said.
Hm...interesting. Let's wait what Sugiharto will say this afternoon.
Antara quoted M Said Didu, secretary to the ministry of SOEs, saying the Rp11,350/share already a record for Indonesia because this is the first time such divestment got premium price. He should read archives!

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Too many generals: Inflation!

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Former army chief of staff leads education organization

General (ret) Tyasno Sudarto won the chairmanship of Perguruan Tamansiswa, an education organization which runs nationwide network of schools. Tyasno was chief of staff during early years of Abdurrahman Wahid administration. He was the one who propose early pension for generals in civilian jobs, including Susilo Bambang Yudhoyono (the president).

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Anwar Adnan, West Sulawesi governor

Golkar politician Anwar Adnan Saleh sworn in as the first West Sulawesi governor yesterday. The new province is home to increasing oil and gas exploration activities. Major blocks are Karama, Malunda, Mandar, Kuma & Kudong.

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PGN divestment turns sweet & sour for Sugiharto

After more than one year of suspension, government finally divests 185.8 million shares of PT Perusahaan Gas Negara (PGN) Tbk, represents 5.31% outstanding shares, through bookbuilding process handled by Danareksa, Bahana, and Credit Suisse on Thursday.

The state-owned investment bank received huge demand from investors with 1.9 times of amount of shares on sale with average price of Rp11.300 per share, even though government actually offered 5% discount from Tuesday's closing. But things changed quickly when one investor, reportedly from Malaysia, submitted an offer to buy the whole shares at Rp12,150 which is 7% premium.
It was 3PM on Thursday. Danareksa stunned with the information because this 'ghost' investor was said to have direct deal with officers at the state-owned enterprises ministry.
"The bookrunners then start to ask who the hell is the guy. We're confused because if we quote the price at Rp11,300 while public get the information that someone actually offered better price for the government, we'll be under public pressure. But if we sell all the shares to that 'ghost' investor, the question is what kind of deal he/she has with the ministry," a dealer at Danareksa said.
"I'm not surprised if the Malaysian investor is the one with under-the-table agreement with certain officers. Or may be there is no Malaysian investor, but a proxy investor," said an investment banker in Jakarta.
"We're quite suspicious with the transaction. We even heard the so-called Malaysian investor was ready to buy at Rp14,000/share. But you know, it's just too good to be true," a Tempo editor said.
But the Rp11.300 is clearly not the best price. It reflects almost 17% discount from PGN's highest price this year. Politicians have something to play, especially those who want to mount pressure toward Sugiharto.
Kompas in its Friday edition quoted two legislators from PAN, Drajad Wibowo & Didiek J. Rachbini, criticizing government's failure to get the best price. They called it too low, too slow.
At the same time, these guys indirectly defended Sugiharto calling the divestment shown poor coordination about privatization and the intention behind it, which is merely to fill budget gap (this year's target is Rp3 trillion from privatization).
"Sugiharto might be blamed or charged for potential loss to the state and it's a corruption, but he could defend himself saying he sell PGN to meet the target set under the 2006 budget law and blame his colleagues in the cabinet. Blame games," a political analyst said.
This is big game. Those who have information about when Sugiharto will push the button might have bought PGN shares at very low price in the last few months and get the upside.
"The shares must have been swept at cheap price, and will get huge amount from the upside once Sugiharto push the button," other investment banker said.
That's a conspiracy theory. JSX suspended PGN shares trading on Wednesday. Prior to the placement, government controls 59.357% shares of PGN. The second largest shareholder is RS + Co International Ltd at 8.843%.

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Energy Ministry blocked Inco's tender offer

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New Kids on the Oil Blocks

In recent years, lots of new companies (some owned by old Soeharto cronies) have been awarded oil and gas blocks. Who are these people?

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Prajogo's mother passed away

Phung Fo Jin, the mother of tycoon Prajogo Pangestu (Barito Pacific Group), passed away at 101 yesterday.

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Corporate briefs

Bisnis Indonesia reported that polyester producer PT Polysindo Eka Perkasa Tbk (Texmaco Group) secured USD50 million financing from Damiano Investment. Damiano is the biggest shareholder of Polysindo with 82.75%.

Meanwhile, foreign investors control almost 16% shares of PT Bank Mega Tbk. Para Global Investama, owned by Chaerul Tanjung family, remains the largest shareholder with 31%.

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Aceh election aftermath

It's almost certain that former Free Aceh Movement (GAM) leader Irwandi Yusuf wins the historic election in Aceh. Another former GAM leader also leads the race for North Aceh Regent, home to major industries. What's next? What the new leader will do with the existing investments, including FDI like cement giant La Farge or oil giant ExxonMobil & ConocoPhilips, in the provice? Into what direction?

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PPA offloads Jasa Marga bonds

PT Perusahaan Pengelola Aset (PPA), a company established to manage assets left after the closure of Indonesia Bank Restructuring Agency (IBRA), has started the sale of two bonds issued by PT Jasa Marga for the Jakarta Outer Ring Road (JORR) project with combined outstanding of Rp440 billion. PT Indo Premier Securities, once linked to people close to MSOE Sugiharto, acts as selling agent and financial advisor for the offer.

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Bumi Resources insider trading investigation

Jakarta Stock Exchange (JSX) has launched an insider trading investigation on PT Bumi Resources Tbk, but no such initiatives taken for Medco and Energi Mega Persada shares trading. Investigation is focused on shares trading prior to the cancellation of mega deal USD3.2 billion between Bumi Resources and Renaissance Capital in August.

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Abeng-Riady business network

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Bank of India acquires 76% Bank Swadesi

Bank of India has acquired 76% shares of PT Bank Swadesi Tbk, a small bank with total asset of Rp958 billion as of Sept 2006 at undisclosed price. The bank's previous controlling owners were PT Panca Mantra Jaya and PT Putera Mahkota Perkasa with 39% shares respectively. In November 2005, Bank of India had also acquired 76% shares of another small bank PT Bank Indomonex for about USD6 million. While it's not clear yet of possible merger of Indomonex & Swadesi, under the existing single presence policy set by Indonesia Central Bank, it's likely that Bank of India would merge the acquired banks.

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Peaceful election in Aceh, former GAM leader wins

Millions of voters peacefully went to election booths today. According to Quick Count released by political entrepreneur Denny JA, former Free Aceh Movement (GAM) leader Irwandi Yusuf leads with almost 40% eligible votes, Detik.com reported. Mr Irwandi was former GAM representative in Aceh Monitoring Mission (AMM) established to monitor the implementation of peace deal signed by GAM and central government in August 2005.

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Salim Group won Philippine water privatization

Salim Group's subsidiary Metro Pacific Investment Co (MPIC) and its partner DMCI Holdings Inc won the competitive bidding to acquire 83.9% shares of Maynilad Water Services Inc from Philippine govt at USD447 million. MPIC is the local unit of Salim Group's Hong Kong-listed First Pacific Co., which also controls Philippine Long Distance Telephone Co. (PLDT), the country’s largest telecom service provider. This is one of the largest overseas investment from Salim in recent years besides the USD5 billion investment in India.

Salim Group's other major investment is Dalu Coal Chemical Industrial Park in Mongolia, which has recently started its construction in Zhunge er County of Erdos City. The company also invests USD240 million on dairy farm in the country.
Few years back, Salim acquired 45% shares in Cosco Property Group with USD500 million. This gave the Salim group an entry into Shanghai’s booming real estate business. How about Indonesia, where Salim started to build up its fortune?

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Bakrie & Daewoo pipe cooperation

PT Bakrie & Brothers Tbk admits the signing of a memorandum of understanding to develop and marketing pipe products with Daewoo International Corporation. In a letter to JSX today, Bakrie said both companies agree on development and marketing of pipe produced by subsidiaries, PT South East Asia Pipe Industries (SEAPI) and PT Bakrie Pipe Industries. Details of the cooperation will be announced to investors at public expose scheduled next week.

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CP Prima performance not that premium

In contrast to its over-subscription of shares offering last month, PT Central Proteinaprima Tbk or CP Prima reported lower gross profit in Jan-Sep 2006 at Rp625 billion against Rp647 billion in the same period last year on increasing costs. The company's net profit after adjustment with debt restructuring at Rp154 billion is only 7% higher than the same period last year.

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Wijaya Family, Sinar Galaxy & Commonwealth

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Tata & Bumi Resources divestment

Media had reported earlier that five prospective investors are competing to acquire up to 30% shares of PT Bumi Resources Tbk. One of them is Tata Group, India. But it's not clear whether they want 30% of Bumi shares or simply divest its subsidiary PT Kaltim Prima Coal, the largest coal producer in Indonesia. Controlling owners of both companies met in India last week! But others doubt that.

"We heard that Tata also sent Adaro Indonesia (the second largest coal producer) an unsolicited letter inquiring about buying a significantly minority stake in Adaro. So, I suspect they're just sniffing around, not really serious about making actual acquisitions," a banker at European-based investment bank said.

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Third Generation of Salim Group

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Lapindo disaster's overdue payments

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Bakrie family divest 700 million Bumi shares

Long Haul Holding Ltd, a company owned by Bakrie family and some businessmen, is scheduled to divest 700 million shares of PT Bumi Resources Tbk through JSX today at Rp840/share, Bisnis Indonesia reported. Long Haul is the owner of 1.08 billion shares of Bumi, represents 5.59% of outstanding shares. Total proceeds from the divestment for Bakrie, with CLSA as the book runner, would be Rp588 billion. It's not clear what the family will do with the money. "The family is clearly in need of enough liquidity. But I'm not sure what exactly," one executive close to the family said.

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Mitsubishi won EPC for Senoro LNG

Mitsubishi won USD600 million EPC contract to build LNG train in Senoro, Central Sulawesi, Investor Daily reported.

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Safeullah Yusuf: From PDIP, PKB and then PPP?

Most politicians are "opportunists" by nature, to some extent at least (they aim to utilize political opportunities to their advantage), Wikipedia said.

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Indonesia's bitter-sweet sugar business & politics

Indonesia is one of the largest sugar consumers in the world with 2.6 million tones per year. As domestic production increased only slightly from 2.24 million tones in 2005 to 2.3 million tones this year, more than 10% of demand should be filled with import. Sugar is a sweet business with around USD1.7 billion revenue per year. But old political games survived & nastier, with new players. Who are they?

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Sukanto Journalism School in Spore, why not here?

Investor Daily reported that Indonesia's richest man Sukanto Tanoto donated S$1 million to journalism school at Nan Yang Tech University in Singapore. The money would be used to finance two Indonesian students per year to learn journalism in Singapore. Quite strange, learning journalism in a country without press freedom? Why not in Indonesia?

Donation is an noble act. You could be seen by some as a noble man, while others may keep calling you a 'thief' because you had walked away from liabilities in the past as what Anwar Nasution, chairman of BPK always labelled on Indonesian conglomerates.
As for Sukanto, through his Tanoto Foundation, he is actively involved in what some newspapers called phylantropy. He's not alone. Eka Tjipta, Aburizal Bakrie, Soeharto have similar foundations. Besides, foundation is the perfect way to pay less tax to the state. Well, I should ask MoF Sri Mulyani about tax payments of Indonesia's richests.
With USD2.3 billion wealth (according to Forbes), donating S$1 million is clearly a peanut. But that amount is big enough to build elementary schools in the country, which from my perspective is the weakest of our educational system.

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Yahya Zaini-Eva Maria video, the most searched!

Yahoo! announced on Wednesday that Britney Spears topped it's most popular search term list for 2006. Spears shares the top five with fellow blonde celebrities Shakira at No. 3 followed by Jessica Simpson and then Paris Hilton. President George Bush was the most searched politician this year. But I got information today that Yahya Zaini-Eva Maria's 5-minute sex video clip topped Google.co.id's most popular term list this year.

Frankly, I just watched the clip. Someone emailed me. The clip was also listed as the most popular search at Youtube.com even though the duration is 42 seconds only, Detik.com reported.
But when I searched that with keyword "Yahya Zaini" I stumbled at three completely unrelated clips (a boy taking shower with Reage soundtrack Red Red Wine, monkeys etc).
From what I saw in the emailed clip, I got the impression that the moment was intentionally tapped showing Yahya walked nakedly approaching Maria who lay down on bed naked with a towel covering her stomach. The clip showing Yahya's very little buddy and a zoom on her's. He tried to stop the tapping, but seems focused on her's.

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SBY vs JK in the brawl over SOEs

Below is the list of brawls between SBY & JK over important issues at state-owned enterprises, including the management selection (member of the board of directors plus commissioners). It's almost similar with their competition in overseas trips (state visits). It's everywhere! Anybody has the original version of SBY & JK memorandum of understanding on how they would share the power when they decided to join forces in 2004 election?

The recent 'mini' reshuffle at the state-owned oil and gas company PT Pertamina could well explain the brawl. "It's clear that the former chairman of board of commissioner Martiono Hadianto couldn't get along with board of directors. Internally, we could sense that," one Pertamina executive told me this morning.
"The replacement is not merely a management issue, it's a political issue. Everybody knows Martiono was seen as VP's man, while his successor has close relationship with the president," said one executive at SOE who happens to be proposed by MSOE Sugiharto as commissioner at Pertamina but failed to get approval from The Final Evaluation Team (TPA, which selects executives for SOEs).
"Now the balance at Pertamina is two VP's men and two president's men, another one represents SOE Ministry who happens to be close confidante of Sugiharto," executive at the MSOE said.
A week before that, major shakeup occured at another giant SOE, PT Perusahaan Gas Negara (PGN) Tbk. This time, Sutikno named as the new CEO, replacing WMP Simanjuntak (appointed president commissioner).
"Some says Sutikno got the position thanks to strong lobby from PAN's chairman Sutrisno Bachir. But don't expect they'll confirm that. Sutikno is known for his close relationship with Amien Rais, key patron leader of PAN. So, this is a political bargaining as well," another SOE executive said.
But where is the brawl?
"Actually, VP proposed other candidate for PGN but TPA picked Sutikno. As a result, there is on-going battle for other posts still vacant," the executive said.
The ugliest brawl is actually at PT Tambang Batubara Bukit Asam Tbk, the state-owned coal producer. TPA has yet to decide the executives and leaving the company in the hands of board of commissioners for almost one month now.
Similar situations have been emerged at other giant SOEs like PT Telkom Tbk and PT PLN. Look at how the board of commissioner of Telkom led by Tanri Abeng (key ally of VP) sent a letter to Sugiharto in late August asking for Arwin's replacement.

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Former chief of staff as chairman of forestry business association

Indonesia Forestry Business Association (APHI) has elected Lt Gen (ret) Sugiono, former chief of staff for general affairs, as its chairman.

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Those who control airport projects

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Ratu Atut confirmed as the winner

Banten Province Election Committee (KPU) had confirmed Ratu Atut as the winner of gubernatorial election in the province despite protest from her competitors who reject the result, Kompas reported. Atut won 40% votes, followed by Zulkieflimansyah (33%).

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Adaro secured bondholders consent

PT Adaro Indonesia has secured bondholders consent for up to USD300 million refinancing facility. Adaro, the second largest coal producer in Indonesia behind PT Bumi Resources Tbk's subsidiary PT Kaltim Prima Coal, got the consent from majority 93% of bondholders, far above the 65% requirement.

Adaro had total assets of
US$1.4 billion at March 31, 2006. It is the largest single-mine coal producer
in Indonesia, with capacity of 38 million tons per year in 2006 and reserves
of at least 14 years.
In September, Standard & Poor's affirmed its 'B+' corporate credit rating on PT Adaro
Indonesia with stable outlook.
According to the rating agency, Adaro has an aggressive capital structure. The pro forma total debt, which includes mezzanine debt, to capitalization of Adaro and its related companies was 80% at March 31, 2006, while total debt to annualized EBITDA was 4x. Nevertheless, Adaro's profitability is improving, as recently negotiated
long-term sales contracts take into account higher spot prices and increased
production volume.

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Energi resumes Kangean gas

PT Energi Mega Persada Tbk has resumed gas production and delivery from Kangean block in East Java eight days after the stoppage due to gas pipeline blast in the mudflow-covered area of Sidoarjo, East Java. Energi resumed gas delivery at minimum rate of 45 MMSCFD. Meanwhile, Santos Maleo, delivers additional 22 MMSCFD to meet the demand of PT Perusahaan Gas Negara (PGN) Tbk customers.

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Helman Sitohang & CSFB's exposure in Indonesia

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Behind Pertamina's mini reshuffle

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State to finance infrastructure repairs of Lapindo disaster

Slowly but sure Lapindo's burden over Sidoarjo disaster would be financed with state budget. Yesterday, parliament and government agreed to use the state budget to finance the repairs of infrastructure facilities hit by the mudflow, Tempointeraktif.com reported. Last week, parliament also endorsed government's proposal to use the disaster fund in 2006 budget to help people affected by the mudflow. Repair of two facilities (road & railway) could cost the state Rp443 billion. How generous!

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Corruption Eradication: Big Stick & Small Carrot

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Bumi shares buyback so far

PT Bumi Resources Tbk had bought back 653 million shares in the last few weeks or almost one-third of the total amount allowed, and the price has been lifted by Rp100 or 14% from its lowest level at Rp710. But the program has clearly saved the controlling shareholder from defaults on repo & loan, right? If the buyback of remaining shares on the block would create the same price effect, the program would lift Bumi shares price by 42%. Total cost, max Rp2.3 trillion or USD250 million.

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Sampoerna is in talks to enter Medco

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Bakrie's next move to pay the bills

What will Bakrie family do to pay the sky high bills of Lapindo disaster?

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No cabinet reshuffle so far, possible March 2007

December 5, 2005, President SBY reshuffled his cabinet. But for those who expect another reshuffle this year, forget about it! The president has entered the comfort zone. Really? "Most likely the reshuffle will be in March 2007," one editor of Tempo magazine told me.

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The contrast of Hot & Cool Money in Indonesia

Global liquidity helped boost JSX composite index by more than 56% this year. But foreign direct investment dropped significantly by 45%. What a contrast!

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Former military commander, new Pertamina chairman

Government appoints former military commander general (ret) Endriartono as the new president commissioner for the state-owned oil and gas company PT Pertamina replacing Martiono Hadianto. President SBY scored another victory over Vice President Jusuf Kalla? Besides Endriartono, another new member of Pertamina's board of commissioner is Irnanda Laksanawan, currently officer at the state-owned enterprises minister. Umar Said, Muhammad Abduh, and Maizar Rachman (former OPEC governor) are maintained as other members. No detail explanation available on why Martiono is replaced. Read full report on Endriartono & Irnanda's profiles.

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Divestment of up to 40% shares at BNI, next year

Management of PT Bank Negara Indonesia (BNI) Tbk has proposed the divestment of up to 40% shares next year through rights issue and secondary offering. The proposal could generate up to Rp12.6 trillion. But the implementation is subject to parliament's approval. Initial comments from some legislators called the size (40%) is too high and 20% would be considerable size.

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Holding Company for Energi Mega & Bumi Resources

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Financial powerhouses behind Natuna D-Alpha

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The rise & fall of Ginandjar Boys

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SBY's inner circle: Part III

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Tanri Abeng & energy business

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Habibie's son & energy business

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Jusuf Merukh, a man with thousand licenses

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Sariaatmadja Family, business & political network

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The politic of video-phone sex clip

Golkar Party had accepted Yahya Zaini's resignation as chairman of religious affairs at the party's central executive board less than a week after the video-phone sex clip (Yahya as the performer and singer Maria Eva) widely distributed and sparked controversy. VP Jusuf Kalla, who is also chairman of Golkar Party, has reportedly accepted that. "He want to tell Indonesian people that his Little Buddy is not so little," a friend said. What a coincidence! Maria's lawyer, Ruhut Sitompul, was a former Golkar Party's executive but recently jumped ship to SBY's Democrat Party.

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Fuad Bawazier, from dictatorship, radical left to right

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Runaway with USD3.1 million

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Indofood's new bond issuance

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Panigoro, Encore, & Medco

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