Canadian firm to acquire Dharmala stake

Canadian firm to acquire Dharmala stake

JAKARTA (JP): Manulife Financial of Canada, foreign partner of
joint venture PT Asuransi Jiwa Manulife Indonesia (AJMI), has
placed a Rp 160 billion (US$17.7 million) bid to acquire now
insolvent PT Dharmala Sakti Sejahtera's (DSS) 40 percent stake in
the joint venture, a source said.

A representative from one of DSS's creditors said on Wednesday
that the Canadian firm, currently holding 51 percent stake in
AJMI, was ready to finance the acquisition to increase its stake
AJMI to 91 percent.

"Their bid is well above the latest appraised value on the
company by an independent firm," he said.

The value of the 40 percent stake of AJMI according to an
appraisal conducted by independent firm Deloitte and Touche's in
early 1999 stood at between Rp 109 billion and Rp 145 billion.

AJMI is currently owned by Manulife Financial of Canada, 51
percent, the World Bank's private investment arm International
Finance Corporation, 9 percent, and DSS, 40 percent.

DSS was declared bankrupt in early June this year at the
Jakarta Commercial Court, following the company's failure to
repay its matured debts.

Trying to recoup their money, the creditors -- following DSS's
bankruptcy status -- decided to liquidate the valuable assets of
the insolvent company and distribute all the sale proceeds
proportionately among the creditors.

The process of selling the assets of the bankrupt company and
distributing them among the creditors, according to the 1998
Bankruptcy Law, must be conducted under the court's supervision
by an independent party called a "court receiver".

In DSS's case, the liquidation process did not go smoothly as
creditors disagreed with the commercial court on who should serve
as the court receiver.

But, the commercial court-appointed receiver, Lucas from Lucas
& Partners law firm, finally had to resign from his position
following the creditors' strong demand to maintain the right to
appoint a court receiver on their own.

The creditors of DSS voted on Thursday to appoint Ari Ahmad
Effendi from AAE & Associates as the new court receiver to
replace Lucas.

Lucas claimed that he had done his job as a court receiver for
DSS professionally, but had to pull out as he saw there were
unhealthy intentions among the creditors. Lucas did not
elaborate.

Another representative from one of the creditors said that
nothing was wrong with Lucas, saying, "We just have to have a
court receiver that is appointed by ourselves, not by the court."

The creditors' right to appoint their own court receiver is
clearly backed by a clause in the 1998 Bankruptcy Law, he added.

A court receiver, under the supervision of the commercial
court and the concerned creditors, should work for the creditors'
interests by striving to reach the highest possible price in
selling the insolvent company's assets and proportionately
distributing the proceeds among the creditors.

A court receiver, as stipulated by the 1998 decree of the then
minister of justice, receives a progressive commission fee of
between 1.5 percent and 6 percent of the assets sold.

DSS owns 11 affiliated companies, which include AJMI, as well
as publicly listed companies PT BBL Dharmala Finance, PT ABDA and
PT Maskapai Reasuransi Indonesia.

The above representative of DSS's creditor estimated that the
court receiver would receive a commission fee of about Rp 17
billion from selling DSS assets.(udi)