CalEnergy more hopeful on Indonesia

CalEnergy more hopeful on Indonesia

CHICAGO (Reuters): CalEnergy Co. Inc. has said it is more optimistic about the outlook for its investments in Indonesia with the country's currency much stronger than a few weeks ago.

"We are more optimistic about the situation in Indonesia that we were three or four months ago," Don O'Shei, president of CalEnergy Development Co. told Reuters in an interview.

The Indonesian rupiah was trading on Friday at around 8,100 to the U.S. dollar. It was quoted in early March as low as 12,300. It touched a historic low of 17,000 in January.

The power company said in January that 1998 earnings could be cut by as much as $0.40 a share if Indonesia were to annul its contracts or to expropriate CalEnergy's investments there.

CalEnergy noted then its Indonesian investments were less than 5 percent of its total assets of US$7 billion.

O'Shei put its current investments at around $275 million. It is involved with several geo-thermal power projects.

CalEnergy also took a one-time charge of $87 million in the fourth quarter of 1997 linked to the write off of Indonesian projects.

O'Shei said it was too early yet to come to any firm conclusions on the prospects for its Indonesian investments.

"The situation in Asia is still much too fluid to make any long-term judgments," he said.

Indonesian Finance Minister Fuad Bawazier said on Friday he expects the International Monetary Fund to release its next tranche to his country at the end of April.

CalEnergy shares fell to a low of around 22 in January as concern about its investments in Indonesia grew but the stock has since recovered slightly. Shares closed on Friday up 3/8 at 30- 3/8.