Apac Centertex to acquire two companies

Apac Centertex to acquire two companies

JAKARTA (JP): PT Apac Centertex Corporation plans to acquire
PT Apac Inti Corpora and PT Batam Textile Industry at Rp 510
billion (US$222.7 million), the company announced after a public
exposition yesterday.

To finance the acquisition, Apac Centertex will raise Rp 510
billion from the stock market by issuing 4-to-1 rights shares and
1-to-1 mandatory convertible bonds. Deutsche Morgan Grenfell is
acting as lead underwriter.

Apac Centertex is a garment producer formerly owned by Robby
Tjahjadi under its original name of Mayatexdian. The company was
acquired by a consortium owned by Bambang Trihatmodjo and Johanes
Kotjo last February.

In the last two years, the company booked net losses of Rp 9.8
billion and Rp 23.3 billion, putting it at risk of being delisted
from the Jakarta Stock Exchange if losses continue this year.

It was reported that in the first six months of this year,
Apac Centertex made a net profit of Rp 200 million.

The target company, AIC is a merger of three companies -
Kanindo Succes Textile, Kanindo Prima Perkasa, and Kanindo Mulia
Utama - which were founded by Robby Tjahjadi in 1990. Early this
year, a consortium owned by Bambang and Kotjo took over the three
firms by purchasing their assets and liabilities.

Apac Inti, with its paid-up capital of Rp 300 billion, is now
91.7 percent owned by PT Apac Century Corporation and 8.3 percent
by cooperatives.

Kotjo told newsmen yesterday that Apac Inti currently holds
total assets of Rp 1.3 trillion and has total debts of Rp 900
billion from state-owned banks.

The company's debt-equity ratio is 3:1, he said.

Kotjo said that Apac Centertex will reduce the debts of Apac
Inti by Rp 300 billion after the acquisition.

He said that Batam Textile, which currently holds total assets
of Rp 274 billion, has a debt of Rp 178 billion.

Although both the acquired companies have large debts, Kotjo
claimed that the acquisition is a strategic one.

Apac Centertex's president Benny Sutrisno shared Kotjo's
opinion. "We see a bright future after the acquisition. All the
companies - Apac Centertex, Apac Inti and Batam Textile - have
their own strengths. Their synergy will transform Apac Centertex
from a simple garment company into one of the largest fully
integrated textile groups," said Benny.

Apac Inti operates the largest spinning and weaving mill in a
single location at Bawean, Central Java, where labor costs are
lower than those in Jakarta and Bandung, West Java.

Batam Textile operates an integrated textile facility for
spinning, weaving, dyeing, printing and finishing. It is also one
of the largest exporters of textile products to the United
States.

Benny explained that Apac Centertex will purchase Apac Inti
shares at their nominal value, while Batam Textile is offering
Apac Centertex a discount of Rp 20 billion for its shares,
presently valued at Rp 100 billion.

Apac Centertex, however, is awaiting approval from its
independent shareholders for the planned acquisition. (08)