Japanese firms may control Hexindo

JAKARTA (JP): Hitachi and Itochu Group, both of Japan, have pledged to buy all rights shares to be issued by PT Hexindo Adiperkasa in the next few months if other shareholders do not take the rights, a Hexindo executive said yesterday.

Company president Rustam Effendi said the two Japanese companies -- which currently control a combined total of 25.03 percent of the company's shares -- would become majority shareholders if the scenario played out.

Hitachi would control 40 percent of the company's shares, Itochu 22.54 percent, Hexindo Adiperwira 24.31 percent, Hitachi of Singapore 5 percent and the public 8.04 percent.

Hitachi currently controls 9.73 percent of the company's shares, Itochu 15.39 percent, Hitachi of Singapore 10.48 percent, PT Hexindo Adiperwira 48 percent and the public 16 percent.

Hexindo plans to issue 42 million new shares in a limited public offering in the next two months to raise about Rp 42 billion in fresh funds to repay its debts.

The company, he said, had a total of US$50 million in debts to Japanese principals Hitachi and Itochu, and another $22 million owed in bank loans to overseas banks.

He said the country's crisis had made the company technically bankrupt because domestic demand for its heavy equipment had declined by 70 percent.

Heavy equipment accounts for 70 percent of the company's sales, with the remainder taken up by coal mining services.

"With no construction activities in the country, we expect further losses this year."

He said the company recorded a net loss of Rp 29.71 billion last year due to mounting foreign exchange losses of Rp 31 billion and a provision of Rp 16 billion to its local customers. (aly)