Consortium clears hurdle to acquiring Kanindotex
Consortium clears hurdle to acquiring Kanindotex
JAKARTA (JP): A politically well connected consortium has
overcome the final hurdle to its acquisition of the Kanindotex
textile group which defaulted on Rp 1.3 trillion (US$585 million)
in loans owed to two state banks.
"Bank Bumi Daya and the Development Bank of Indonesia
(Bapindo) have agreed on annual interest of 11 percent for their
working capital loans," Bambang Trihatmodjo, chairman of the
consortium, confirmed yesterday.
Bambang said after a meeting with Coordinating Minister for
Trade and Industry Hartarto that the consortium is now waiting
only for approval from the finance minister before the final
agreement on the takeover is signed.
"Since we no longer have any problems with the bank creditors,
we expect to take over Kanindotex's management shortly," Bambang
was quoted by the Antara news agency as saying.
The consortium also includes Bambang Yoga Soegomo, son of a
former chief of the national intelligence agency, and Johannes
Kotjo, a former executive director of the Salim group, who is now
building up a conglomeration of companies of his own.
The interest rate Bambang Trihatmodjo referred to is related
to the Rp 935 billion in short-term loans from the same two state
banks.
Under its bid offer, the consortium would repay Rp 420 billion
of Kanindotex's investment loans and would have the remaining Rp
935 billion in debts rescheduled to eight years with an annual
interest rate of two percent in the first four years and four
percent for the remaining four years.
The two state banks rejected the consortium's proposal for the
interest rates on the rescheduled debt portion as too low.
But as Bambang confirmed yesterday the two state banks finally
agreed on an annual interest rate of 11 percent, a level which is
well below the prevailing market rates of 18 percent to 20
percent at present.
If the finance minister approves the results of the
negotiations between the consortium and the two state banks, the
consortium will own at least 90 percent of Kanindotex with the
other 10 percent owned by cooperatives.
However, the consortium's bid to take over Kanindotex has been
opposed by the Indonesian Chamber of Commerce and Industry
(Kadin) and many other analysts, who want the textile group to
remain under the management of the GKBI cooperative group.
GKBI itself has been managing Kanindotex under a three-year
contract with the two state banks which will expire in September,
1997.
The consortium has said that it will take over the management
as soon as it has acquired the majority ownership in Kanindotex
which owns three textile plants in Central Java. (vin)