Mar'ie to announce 'the real rescuer' of Kanindo soon

Mar'ie to announce 'the real rescuer' of Kanindo soon

JAKARTA (JP): Finance Minister Mar'ie Muhammad promised
yesterday to announce next week "the real rescuer" of the debt-
ridden Kanindo Group.

The minister told newsmen that negotiations over the takeover
of Kanindo, which operates a number of textile plants in Central
Java, were almost complete.

At least two business consortia have been widely reported to
have been engaged in intensive negotiations to take over the
ailing Kanindo.

One of the consortia, comprising of Johannes Kotjo and his
partners, however, announced over the weekend that it pulled out
from the takeover bid.

The announcement was made following the appointment of two
state-owned banks, Bank Pembangunan Indonesia (Bapindo) and Bank
Bumi Daya (BBD), to provisionally take over Kanindo's management.

Another consortium comprising of Texmaco Group, also a major
group of textile companies, and the Association of Indonesian
Batik Producers (GKBI) have also expressed intentions to take
over Kanindo. A GKBI director was reported to have been appointed
as Kanindo's new president.

Mar'ie, however, declined to comment when he was asked about
the report.

In a statement made available to The Jakarta Post Sunday,
Kotjo said his consortium had stopped injecting fresh funds into
Kanindo.

Kotjo and his partners agreed in July to inject fresh funds of
around Rp 850 million (US$400,000) per day over a six month
period, beginning Aug. 1 to prevent Kanindo from collapsing.

Opposition

The move, apparently seen as an initial step in taking over
the whole operation of the company, was opposed by the government
following a widely published fake export scandal centered around
one of the partners.

Kanindo is owned by Robby Tjahjadi, a controversial
businessman who was once jailed for his involvement in the
smuggling of luxury cars into the country. The company was
reported to have defaulted debts of around Rp 500 billion ($238
million) in Bapindo and BBD.

Robby, according to reliable sources, received credit
facilities totaling Rp 474 billion from BBD and Bapindo in the
period between 1990 and 1993 to build up its textile giant, now
known as Kanindo Textile Group.

The loans, which carry interest rates of between 20 and 28
percent per annum, have partially turned sour, leaving Robby with
debt arrears totaling around Rp 376 billion in March. The overdue
is estimated to rise to Rp 490 billion by the end of this year if
no fresh payment is made, the sources said.

Kanindo executives acknowledged that the textile giant
suffered a serious liquidity problem as suppliers of raw
materials for the textile manufacturing required cash for all
goods they sold, following the disclosure of the business group's
debt problem in February.

An executive of another textile company said that Kanindo's
liquidity problem worsened in the following months as Kanindo
sold most of its products below their production costs due to its
severe need for cash.(hen)