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)