Semen Cibinong's $250m write-off plan OK'd<\/p>\n
JAKARTA (JP): Shareholders of publicly listed cement producer
\nPT Semen Cibinong approved on Tuesday management plans to write
\noff the company's controversial \"missing\" deposits worth over
\nUS$250 million, clearing the way for Swiss cement group Holcim
\nLtd. to become the company's majority shareholder.<\/p>\n
Semen Cibinong shareholders also approved a $1.18 billion debt
\nrestructuring plan, under which Holcim agreed to purchase a
\ncontrolling stake in Cibinong.<\/p>\n
Semen Cibinong corporate secretary Jannus Hutapea said that
\nfollowing the shareholders' approval, the company could ink a
\ndeal for a debt restructuring deal by late August.<\/p>\n
\"The write off of the company's time deposits is part of its
\ndebt restructuring deal with Holcim, as they want to clear up the
\ncompany's balance sheet,\" Jannus told reporters after Cibinong's
\nannual and extraordinary shareholders meeting.<\/p>\n
The $250 million in uncollectable deposits have been a major
\ndrawback to Cibinong's financial performance over the past three
\nyears when they first appeared as diminution of investment value
\nin the company's balance sheet.<\/p>\n
Last year, the company booked a heavy net loss of Rp 6.91
\ntrillion (about $611 million) as against a net profit of Rp 25.84
\nbillion a year before.<\/p>\n
Semen Cibinong attributed the drop to the uncollectable
\ndeposits, worsened by foreign exchange losses of Rp 2.75
\ntrillion, and financial charges of Rp 1.11 trillion.<\/p>\n
Semen Cibinong, which accounts for more than 21 percent of the
\ntotal national cement capacity of 46.23 million metric tons,
\nrecorded a 23 percent surge in local sales to 3.2 million tons
\nfrom 2.6 million tons in 1999.<\/p>\n
The controversy over the \"missing\" deposits surfaced in 1999,
\nwhen it caused Cibinong to include a disclaimer in its financial
\nreport.<\/p>\n
Semen Cibinong said it had placed time deposits worth $128.5
\nmillion with the Bank of the Central Pacific Limited in Vanuatu,
\nand another $118.2 million at the Far East Bank Limited in the
\nCook Islands.<\/p>\n
In 1999, the company sought to withdraw the deposits but was
\nunable to do so, as the two banks faced liquidity constraints.<\/p>\n
Speculation then rose that the $250 million went missing,
\nafter the company was unable to prove the existence of the time
\ndeposits.<\/p>\n
Semen Cibinong refused to make public its time deposits
\ncertificates, reasoning that creditors, with whom it was in
\nnegotiation, might freeze the deposits.<\/p>\n
The company once considered taking legal actions against the
\ntwo banks, but its lawyer warned that its chances of winning a
\nlegal battle were slim.<\/p>\n
The company then assigned two public accountants, Moores
\nRowland in Vanuatu, and BDO Spiders in New Zealand to seek
\nfinancial information on the two banks. Both consultants failed.<\/p>\n
In fact, Internet search engines are unable to retrieve basic
\ninformation on the banks, other than their names.<\/p>\n
Jannus said shareholders had mandated Semen Cibinong to
\nnegotiate the return of its time deposits with the two banks.<\/p>\n
But he declined to say whether such an attempt would be
\nworkable, given Semen Cibinong's scant knowledge of the banks.<\/p>\n
He pointed out that despite the write-off of the $250 million,
\nSemen Cibinong retains the right to collect its time deposits.<\/p>\n
Commenting on the debt restructuring deal, Jannus said it
\nwould expand Holcim's stake to 74.5 percent from the present 12.5
\npercent.<\/p>\n
The acquisition is made up of three stages. In the first
\nstage, Holcim will purchase Semen Cibinong's existing debts at a
\ndiscounted rate from creditors, for which the company is to set
\naside $175 million.<\/p>\n
After acquiring the debts, Holcim will convert them into
\nequity to increase its stake in Semen Cibinong to 58.7 percent.<\/p>\n
In the second stage, Semen Cibinong will convert the remainder
\nof its debt principal into new long term debts worth $500
\nmillion. The rest will be converted into equity amounting to 26.4
\npercent of its shares; here Holcim's stake will rise by another
\n7.53 percentage points.<\/p>\n
In the third stage, Holcim would purchase the remaining stake
\nfrom Semen Cibinong's current single majority shareholder, PT
\nTirtamas Majutama, owned by business tycoon Hashim
\nDjojohadikusumo.<\/p>\n
Upon the completion of the debt restructuring deal, Tirtamas
\nwill have relinquished all its 43.31 percent stake in Semen
\nCibinong.<\/p>\n
In addition, the deal will see the shares of the investing
\npublic diluted to 6.4 percent from the present 44.19 percent.
\n(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/semen-cibinongs-250m-write-off-plan-okd-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}