JSX suspends trading of Indorayon<\/p>\n
JAKARTA (JP): The Jakarta Stock Exchange suspended on Monday
\ntrading of shares of rayon and pulp producer PT Inti Indorayon
\nUtama as bewilderment greeted President B.J. Habibie's order to
\nhalt the company's operations.<\/p>\n
The bourse's trading division announced the move was made to
\nprevent price fluctuations in the stock due to unclear
\ninformation about the closure of Indorayon's facility in North
\nSumatra.<\/p>\n
\"Trading on Indorayon has been suspended since 9:30 a.m.,
\nMarch 22, 1999, until further clarification,\" it said.<\/p>\n
\"The Jakarta Stock Exchange is seeking further information
\nfrom the company.\"<\/p>\n
Indorayon was last traded at Rp 200 (2 U.S. cents) a share.<\/p>\n
Habibie ordered on Friday the suspension of the operation of
\nIndorayon's plant near Lake Toba, North Sumatra, in an attempt to
\ncalm tension with locals and allow an evaluation team to conduct
\nan assessment of its environmental and social impact.<\/p>\n
North Sumatra Governor T. Rizal Nurdin said the President also
\nordered a private foundation and an independent audit team
\ncomprising environmental and health experts to evaluate the
\nimpact of Indorayon's operations on the local environment.<\/p>\n
The team is expected to issue a recommendation before Habibie
\nmakes his decision.<\/p>\n
Word in Jakarta, however, is that Indorayon has not received
\nofficial notification of the suspension.<\/p>\n
Analysts said a closure order on Indorayon's mill could
\nbackfire on Indonesia's efforts to sort out its economic
\nproblems.<\/p>\n
\"The issue has dragged on for too long without any clear
\nconclusion. We've heard this since the middle of last year,\" said
\nDavid Chang, head of research at PT Trimegah Securindolestari.<\/p>\n
\"It's bad for Indonesia's reputation. The government does not
\nneed to close a factory just to have an audit report.\"<\/p>\n
He explained that many Indonesian firms, including Indorayon,
\nwere hard-pressed to repay overseas debt, and that closing down
\ntheir operations would only make things worse.<\/p>\n
Indorayon's finance director David Pile was reported earlier
\nto have said the company might default on the interest and
\nprincipal payments of its US$150 million in Eurobonds due in
\n2001.<\/p>\n
Chang said many people dependent on Indorayon for jobs would
\nbe hurt by its closure and uncertainty concerning its status.<\/p>\n
\"People are deeply puzzled about this,\" he said.<\/p>\n
The pulp and rayon producer has been dogged by persistent
\ntroubles since last July.<\/p>\n
Its mills stopped operation in January last year because of
\ncivil disorder and disruption of deliveries of materials and
\nsupplies.<\/p>\n
The company was asked by the provincial government to reopen
\nin November to allow an official audit of its environmental
\nimpact.<\/p>\n
The mills were closed again in January this year before the
\naudit was begun. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jsx-suspends-trading-of-indorayon-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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