JSX to delist Texmaco units in October
Rendi A. Witular, Jakarta
The Jakarta Stock Exchange (JSX) plans to delist textile producer PT Texmaco Jaya and plastic producer PT Wahana Jaya Perkasa, two units of the once mighty Texmaco Group, next month as the two ailing companies are considered to be no longer able to sustain their operations.
But the JSX will spare Texmaco's two other listed units, engineering company PT Texmaco Perkasa Engineering and textile company PT Polysindo Eka Perkasa, as their business operations are likely to be sustainable.
JSX listing director Harry Wiguna told The Jakarta Post on Wednesday that after meeting with the management of Texmaco Jaya and Wahana last month, the bourse had come to the conclusion that their operations could no longer be sustained.
"Of the four Texmaco companies, we have decided to delist two of them because of chronic problems with their financial accounts and their gloomy business prospects. Currently, we are still processing their delisting," said Harry.
Harry explained that the delisting decision was also taken amid uncertainty over the fate of the group's debt restructuring talks with creditors -- both private and the government.
The Texmaco Group, which has fixed assets totaling more than US$2 billion, owes more than $3 billion to the government and about $1.4 billion to overseas creditors. The government has so far failed to sell its stakes in the Texmaco units to new investors.
The group, which was founded by an Indonesian businessman of Indian origin, Marimutu Sinivasan, found itself mired in debt following the Asian financial crisis of 1997, which prompted the government to bail it out.
Harry said the Capital Market Supervisory Agency (Bapepam) had ordered the JSX not to force Texmaco Jaya and Wahana to buy back the shares, since the companies were currently under the control of the government.
Buying back public shares in the two companies would only burden the government, which has pledged not to inject more funds into the company. Texmaco, the country's largest textile conglomerate, said previously that it needed at least $200 million to revive its units' operations.
The public has 20.43 percent of the shares in Wahana and 8 percent in Texmaco Jaya.
"The public will not lose their shares in the two companies. They will still have the control of the companies, but they cannot sell their shares on the bourse. It is just a matter of a change in status from listed to unlisted," said Harry.
The JSX suspended trading in the shares of the two companies last year. Both companies are still operating, albeit at low capacity.
Elsewhere, regarding the suspension of trading in the shares of beverage company PT Ades Alfindo Putrasetia over an allegation that it had deceived investors by overstating its sales volumes, Harry said the JSX would not lift the suspension unless the company violated the bourse's transparency requirements.
In a recent filing with the U.S. Securities and Exchange Commission, Coca-Cola Co. reported that Ades, a joint venture between Coca-Cola and food giant Nestle SA in Indonesia, had inflated its sales volumes by between two million and 13 million bottles every quarter since the third quarter of 2001.
"Ades has not been transparent to us and the public on the impact of the problem on its 2003 accounts. We estimate that these should have revealed a loss," said Harry.
The JSX decided to suspend trading in Ades shares on Aug. 5 following questionable share price fluctuations and the problems with its sales volume.