Hashim's Trans-Pacific needs new investors

Hashim's Trans-Pacific needs new investors

SINGAPORE (Dow Jones): Partners in a partly built US$2.5 billion petrochemical complex in Indonesia say construction can't resume until new investors are found for the cash-strapped megaproject.

Work on PT Trans-Pacific Petrochemical Indotama, a project in East Java led by Indonesian businessman Hashim Djojohadikusumo, halted in March after nearly $1 billion had been spent.

In Singapore, an executive of Japan's Itochu Corp., which holds a 5 percent share, told Dow Jones Newswires that since the existing shareholders can't devote more money to the project, new ones "must be found" or the construction won't be completed.

And the project's chief financial officer, Mihir Taparia, said by telephone from Jakarta Monday that the main shareholder, Hashim's Tirtamas Group, is looking to sell a chunk of its 70 percent stake to get the complex designed to make aromatics and olefins completed.

"We need fresh equity," said Taparia executive vice-president of TPPI, as the company is known. Tirtamas Group, he added, has been "clearly severely impacted" by the Asian economic crisis. Other non-Indonesian shareholders are also cash-strapped at present, Taparia said.

Tirtamas's 70 percent stake comprises a 10 percent holding by PT Tirtamas Majutama and a 60 percent share in TPPI through a Singapore affiliate, Trans-Pacific Petrochemical Ltd. A Singapore unit of Thailand's Siam Cement PCL, Tuban Petrochemicals Pte. Ltd., has 20 percent, while Itochu and Japan's Nissho Iwai Corp. each own 5 percent.

Taparia said Tirtamas is "trying to attract new investors who see Indonesia's long-term benefits." He said TPPI has had "preliminary discussions with possible parties" but declined to comment further. TPPI hopes to add a new investor or investors by early 1999, which would allow construction to continue and the aromatics part of the complex -- currently 64 percent complete -- to being production by early 2001.

The main contractor for the project, 125 kilometers west of Surabaya, is JGC Corp. of Japan. Other contractors include Stone & Webster Engineering Corp. of the U.S. and Daelim Construction Co. of South Korea.