PT Indocement to divest its units to pay debts<\/p>\n
JAKARTA (JP): Publicly listed cement producer PT Indocement
\nTunggal Prakarsa said on Wednesday it planned to divest itself of
\ntwo subsidiaries to help meet debt payments totaling US$861
\nmillion.<\/p>\n
Indocement president Daniel Lavalle said the company would
\nsell off coal mining company PT Indominco Coal Mining in East
\nKalimantan, and property firm PT Wisma Nusantara International.<\/p>\n
\"There are already several foreign investors who plan to buy
\nthe two companies,\" he was quoted as saying by Antara, following
\nthe company's presentation to the public.<\/p>\n
Lavalle hoped to finalize a deal by the end of this year.<\/p>\n
Indocement has a 35 percent stake in Indominco and a 33
\npercent stake in Wisma Nusantara. Their book values are Rp 38.5
\nbillion (about $3.37 million) and Rp 93.7 billion respectively.<\/p>\n
Lavalle said Indocement chose to divest the two firms as their
\nbusinesses were not in line with its own core business.<\/p>\n
Other non-core assets include industrial estate company PT
\nCibinong Center Industrial Estate, engineering service company PT
\nIndotek Engico and shipping company PT Stillwater Shipping
\nCorporation. Indocement owns a 50 percent stake in each.<\/p>\n
In December last year, the company secured a restructuring
\ndeal for its debts, which initially amounted to $1.1 billion.<\/p>\n
The entrance of German-based cement producer Heidelberger
\nZement AG has helped cut the debt level to around $900 million.<\/p>\n
The German company's stake in Indocement was achieved partly
\nunder a complicated rights issue plan, in exchange for absorbing
\n$150 million worth of Indocement's debt.<\/p>\n
\"A substantial portion of the company's borrowings is in
\nforeign currency and is only partly protected by the natural
\nhedge provided by foreign exchange revenue from cement exports,\"
\na statement of Indocement said.<\/p>\n
It said that of its total loans, 65 percent were denominated
\nin U.S. dollars and 33 percent in Yen.<\/p>\n
Lavalle said Indocement would start debt payments next year.
\nThe company will make a first installment of $14 million, with
\ninterest rates pegged at 2 percentage points above the London
\ninterbank rate (Libor).<\/p>\n
Commenting on operating results, Indocement said they were
\n\"remarkably better\" than in the last three years, both in terms
\nof revenue and performance.<\/p>\n
Operating income rose 90.2 percent to Rp 705 billion, as
\nagainst Rp 371 billion the year before. Indocement attributed the
\nsharp rise to a 28.7 percent hike in domestic sales volume,
\ncoupled with improved cement prices.<\/p>\n
Total sales volume rose by 20.1 percent to 10.3 million metric
\ntons, from 8.6 million tons the previous year.<\/p>\n
Indocement's cement production capacity is 15.8 million tons,
\nor 34.1 percent of the country's total cement production of 46.23
\nmillion tons.<\/p>\n
Nonetheless, a sharp plunge of the rupiah against the U.S.
\ndollar sent Indocement's profit plunging into the red, with a net
\nloss of Rp 874 billion, against a profit of Rp 230 billion the
\nyear before.<\/p>\n
Indocement said the rupiah's weakening had inflicted foreign
\nexchange losses of Rp 1.44 trillion.<\/p>\n
On Indocement's outlook, Lavalle said he expected the company
\nto expand its domestic sales by between 10 percent to 15 percent
\nthis year.<\/p>\n
Whereas exports, he said, are estimated to reach 2.8 million
\ntons as against last year's 2 million tons.<\/p>\n
Heidelberger, through its subsidiary, Kimmeridge Enterprise
\nPte. Ltd., owns a 61.7 percent stake in Indocement.<\/p>\n
Heidelberger took over Indocement's shares from the latter's
\nparent companies, the public and the government.<\/p>\n
The acquisition saw the combined stakes of Indocement's parent
\ncompanies, PT Mekar Perkasa and PT Kaolin Indah Utama, dropping
\nto 13.4 percent from 69.25 percent.<\/p>\n
The government's stake fell to 16.9 percent from 25 percent,
\nand the public's stake to 8 percent from 12.25 percent. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pt-indocement-to-divest-its-units-to-pay-debts-1447893297",
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