Argha Karya sells assets

JAKARTA (JP): Shareholders of PT Argha Karya Prima Industry, a publicly listed manufacturer of flexible packaging, approved here yesterday the company's proposal to sell its converting division.

The company's president Ibrahim Risjad said the converting division would be sold for Rp 77 billion (US$26.10 million) to VAW Europack Gmbh of Germany.

He said that about Rp 60 billion of the total transaction value would be for the purchase of land and buildings, while the remaining Rp 17 billion would be for the payment of other assets.

"I think this is a profitable transaction," he told journalists after the shareholders' meeting.

He denied yesterday that the divestment plan was made due to financial problems faced by the company, saying the sale of the converting division was made as part of Argha Karya's restructuring program.

"The aim of the divestment is to make Argha Karya concentrate on its core business," he said.

Risjad said yesterday that proceeds from the divestment would be used to repay the company's short-term debts but he did not elaborate. (aly)