State owned survey companies PT Superintending Company of Indonesia (Sucofindo) and PT Surveyor Indonesia (SI) are hoping that their merger plan will be concluded before the end of this year.
“As of now, we can say that progress is 85 to 95 percent. We hope that we can finish it [the merger] next month,” Sucofindo president director Fahmi Sadiq said on Tuesday.
Fahmi added that there would be no layoffs in either Sucofindo or SI following the merger.
Sucofindo and SI will be merged as part of ongoing consolidation of government assets. Sucofindo will become the legacy company following the merger.
Sucofindo, which was established in 1956, is currently 95 percent owned by the government. The remaining 5 percent is owned by Societe Generale de Surveillance Holding (SGS), whose shares are traded on the SIX Swiss Exchange.
Meanwhile, SI, which was formed in 1991, is 85.12 percent owned by the Indonesian government, 10.4 percent by SGS and 4.48 percent by Sucofindo.
After the merger, Sucofindo will be turned into an almost wholly state-owned firm.
Sucofindo director of resources and strategic planning Beni Agus Permana said that a valuation of the merger concluded that if Sucofindo and SI were merged, SGS’ ownership in the new Sucofindo would amount to around 6 percent.
Therefore, according to Beni, prior to the merger, Sucofindo will purchase part of SGS’ stake in SI so that SGS’ ownership in the company after merger will not exceed 5 percent.
The government needs to control at least 95 percent stake for Sucofindo to be regarded as a state-owned firm.
Fahmi declined to reveal the exact value of SGS’ shareholding to be purchased, but he hinted that the value would not exceed 20 percent of Sucofindo’s cash.
“Sucofindo’s cash was Rp 117 billion (US$10.5 million) as of the end of July,” Fahmi said.
The merger will also mean that a new company with total assets worth around Rp 1.7 trillion will be formed. Sucofindo’s assets amounted to Rp 1.1 trillion as of the end of 2012 and SI’s stood at Rp 600 billion.
Following the merger, the new company is expected to book Rp 4 trillion in revenues this year with net profits of Rp 250 billion.
Beni said that a long-term target had also been set for the new company.
“By 2018, the company expects to reap Rp 10 trillion in revenues with net profits of Rp 1 trillion,” he said.
A series of expansion plans will be implemented to support the growth, including more domestic market penetration and more operations in overseas markets such as Thailand and India.
Sucofindo claims to have a 60 percent market share of the inspection business for the mineral and coal industry, which is the biggest contributor of its current contracts.
SOURCE: The Jakarta Post, Jakarta | Business | Wed, August 28 2013
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