Foreign investors may buy big stake in SSI

JAKARTA (JP): A number of foreign investors are currently holding serious negotiations to buy a substantial stake in PT Surya Semesta Internusa (SSI), a company executive has said.

The company's vice president, Percy Marimba, said Monday that the investors were based in the United States and Asian countries but he refused to disclose their names.

"The negotiations are under way. Hopefully, we can reach something concrete by June this year," he said.

He said Surya Semesta, which operates an industrial estate in Karawang, West Java, and has several business divisions, also plans to quit its hotel-related business.

A domestic investor was still negotiating to buy the company's hotel division, he said, adding that he expected the deal could also be concluded in June.

He said that proceeds from the divestment would be used to improve the company's financial structure, which is currently badly affected by the monetary crisis.

He said the company recorded a 73 percent decline in net profit to Rp 13.4 billion in 1997 from Rp 49.3 billion in 1996 due to a sharp drop in demand for industrial estates in the second semester of 1997.

"This is intensely worsened by an abrupt increase in expenses in the second semester," he said.

He said that the company's revenue also dropped by 9 percent to Rp 572 billion in 1997 from Rp 627 billion in 1996.

He said that most business divisions, except industrial estates, suffered net losses last year.

SSI has four business division: an industrial and real estate division through PT Suryacipta Swadaya; a construction division through PT Alpha Sarana and PT Nusa Raya Cipta; a building materials division through PT Pacific Prestress Indonesia; and a hotel division through PT Suryajaya Anindita International.

He said that PT Suryacipta Swadaya, which operates and manages the company's industrial estates division, recorded a 27 percent hike in net profits to Rp 54.8 billion in 1997 from Rp 43.1 billion in 1996.

He said the company's construction division recorded a net loss of Rp 11.9 billion in 1997, compared to its net profit of Rp 8.1 billion in 1996. Its building division suffered a net loss of Rp 9.2 billion in 1997 compared to its net profit of Rp 1.52 billion in 1996. Hotel and others division incurred a net loss of Rp 7.12 billion in 1997 against its net profit of Rp 6.64 billion the previous year.

He said the company's foreign debts of about US$61.5 million by the end of 1997 were not the main source of the financial difficulties.

SSI had no difficulties in paying the company's foreign loans because most of the revenues were generated in U.S. dollar.

"So there was natural hedging in our overseas debts," he said.

The company's director, Basroni Rizal, said Monday that the company's extraordinary meeting approved the company's plan to sell its stake in PT Denso Indonesia Corporation to Denso Corporation of Japan and its affiliates at a total transaction value of $7.5 million.

"We are selling our stake in order to concentrate on our core business,' he said.

He said that proceeds from the transaction would be used to improve capital structure in its subsidiary.

"We will partly use the proceeds to improve our cash flow," he said at the company's extraordinary shareholders meeting. (aly)