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)