Great River given space to breathe

The Jakarta Post, Jakarta

Shareholders of ailing fashion apparel producer and distributor PT Great River International will inject Rp 55 billion of fresh capital into the company to help its cash flow, according to a senior official.

Darmin Nasution, head of the Capital Market Supervisory Agency (Bapepam), said on Friday the shareholders signed an agreement to inject the funds into the company gradually through the end of the year.

"By the end of the year, the shareholders will disburse up to Rp 55 billion to Great River," Darmin said, adding that the amount would be sufficient to secure the firm's operational costs.

Bapepam is acting as a facilitator in a bid to salvage the firm, which last year produced 14 million pieces of apparel, of which 70 percent were exported -- making it the nation's largest attire maker.

All eyes were on Great River on Jan. 13, when the Jakarta Stock Exchange suspended the firm's shares because of its failure to repay Rp 11 billion worth of interest payments for about Rp 300 billion in bonds it issued in 2003.

Exacerbating the problem was PT Inti Fasindo International (IFI), a subsidiary of Great River, which had trouble meeting its obligation to make Rp 17 billion in bond payments.

Great River owes Bank Mandiri alone Rp 250 billion in the form of bonds (Rp 50 billion) and loans (Rp 200 billion).

According to a recent report it filed with the Jakarta Stock Exchange, Great River is implementing cost-cutting measures.

Darmin acknowledged the capital injection did not mean the company's problems were over, saying the agency would continue to keep a close eye on the firm over the next six months.