APP units estimate smaller losses in 2001<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The two Indonesian units of Singapore-based Asia Pulp & Paper
\nCompany Ltd (APP) said their financial losses for 2001 would come
\nin smaller than in 2000, but more because they cut provisions
\nrather than improved operations.<\/p>\n
Publicly listed PT Indah Kiat Pulp & Paper and PT Pabrik
\nKertas Tjiwi Kimia reported unaudited losses of US$203 million up
\nuntil the ninth month of 2001.<\/p>\n
For 2000 their combined net losses were $760.4 million.<\/p>\n
Tjiwi chief financial officer Gunawan Taslim said that for
\n2001, he expected the company to remain in the red albeit better
\nthan in 2000.<\/p>\n
\"We had no price discounts and provisions on trade receivables
\nlast year,\" Gunawan explained to reporters after the two
\ncompanies' general shareholders meeting on Tuesday.<\/p>\n
Provisions are one-time expenses which are incurred when
\nabsorbing the risk of doubtful trade receivables.<\/p>\n
Tjiwi provisions in 2000 amounted to $144 million on overseas
\ntrade receivables.<\/p>\n
For the same year, Tjiwi also granted price discounts worth
\n$127.67 million for overseas trade partners.<\/p>\n
Gunawan said the price discounts and provisions made in 2000
\nwere no longer reflected in the 2001 balance sheets.<\/p>\n
As of Sept. 30 last year, Tjiwi still reported doubtful trade
\nreceivables with affiliated parties worth $108.91 million.<\/p>\n
For the same period, Indah Kiat reported doubtful trade
\nreceivables worth $410.86 million of a total of $920.01 million.<\/p>\n
Indah Kiat chief financial officer Hendra Kosasih however said
\nthat no provisions were made for that year.<\/p>\n
\"We made provisions only in 2000 not in 2001,\" he said without
\nexplaining.<\/p>\n
Indah Kiat's Hendra said prices of pulp and paper remained
\nrelative stable in 2001, dashing hopes of higher sales revenue.<\/p>\n
Tjiwi and Indah Kiat are APP's main operations here, and their
\nperformance heavily affects the repayment of around $13.9 billion
\nin debts APP owes local and foreign creditors.<\/p>\n
APP early last year suspended payment of its debts as revenue
\nfell due to sagging pulp prices, and amid what analysts said over
\nexpansions in China and Indonesia.<\/p>\n
It is the largest default in Asian debt market history,
\nprompting foreign investors to desert the Indonesian bond market
\nfor almost the entire year in 2001.<\/p>\n
APP is in talks with creditors to restructure its massive
\ndebts, with a deal expected toward the end of this year.<\/p>\n
By July 2002, APP hopes to clinch an umbrella agreement with
\ncreditors to work out debt restructuring schemes for each of its
\nunits, according to Tjiwi's Gunawan.<\/p>\n
He said Tjiwi and Indah Kiat's 2001 annual reports could not
\nbe released until a debt restructuring deal was in place.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/app-units-estimate-smaller-losses-in-2001-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}