BPUI repays Timah with a plot of land
BPUI repays Timah with a plot of land
Rendi A. Witular, The Jakarta Post, Jakarta
After a five-year dispute, state-owned mining company PT Timah
was able to retrieve its investment from PT Bahana Pembinaan
Usaha Indonesia (BPUI), the troubled state-owned investment
company.
In a report to the Jakarta Stock Exchange on Thursday, Timah,
the world's largest integrated tin producer, said BPUI agreed to
settle its US$17 million and Rp 61 billion (about $7 million)
debt through a debt-to-asset swap arrangement.
Under the agreement, BPUI will surrender a 1.76 million
square-meter plot of land Bantar Gebang, Bekasi, West Java.
Timah public relations official Pudji Samekto told The Jakarta
Post a debt-to-asset swap settlement was the only way the company
was able to recoup its investment from the cash-strapped BPUI.
"Well, there was no other option. We are lucky just to get the
principal back because we almost got nothing, as BPUI is also
obliged to repay huge debts to other creditors," said Pudji.
Timah said it had not decided what to do with the land as the
company was currently in need of cash to finance its $20-million
exploration plans.
After news of the deal, Timah shares decline Rp 25 to Rp 725
amid an overall weak market sentiment.
The dispute between Timah and BPUI began in 1998 when Timah
made a short-term investment of $22 million and Rp 61 billion
through the purchase of BPUI promissory notes.
After three months, BPUI was only able to pay back $5 million,
defaulting on the remainder.
Timah attempted to recoup its money several times, filing a
number of bankruptcy suits against BPUI between 1998 and 2001.
The company was also competing with other BPUI creditors
attempting to recoup their investments.
The company suffered serious money woes during the tenure of
Sudjiono Timan, BPUI's president between 1994 and 2001.
According to state prosecutors, BPUI suffered losses of at
least $240 million during these years.
Sudjiono was accused of channeling the company's money to a
number of influential businessmen. Sudjiono was brought to trial
in September 2002 for corruption, but was eventually acquitted on
all charges.