Tue, 23 Aug 1994

Measures sought to revive debt-ridden PT Kanindo

JAKARTA (JP): Minister of Finance Mar'ie Muhammad acknowledged yesterday that PT Kanindo Success Textile, a textile manufacturer, is facing financial problems and that the government is seeking measures to save its operations.

"I cannot make any comment on the measures to be taken to save the textile company because they are now still being investigated by the Ministry of Finance and the Ministry of Industry," he told reporters after meeting with delegates of the Islamic Development Bank (IDB) here yesterday.

Minister of Industry Tunky Ariwibowo also declined to give any comment last week.

"We have actually found out that the company is now embroiled in a financial debacle but we are now studying all the reasons of its bad debts," Tunky was quoted by Bisnis Indonesia yesterday.

Kanindo Success Textile, a subsidiary of the Kanindo Group owned by Robby Tjahjadi, is reportedly in the process of being acquired by the Texmaco Group and the Association of Indonesian Batik Cooperatives (GKBI).

Mar'ie said Kanindo's should be secured because it employs a large number of people and part of its products is exported to earn foreign exchange.

A report said that the Kanindo Group's debts reached over Rp 500 billion (US$230.30 million).

"But in spite of the planned efforts to revive the textile firm, the government will not allow any state companies to be involved in its takeover," Tunky said.

"State companies have their own jobs, which does not include taking over private businesses. Let private companies solve their own problems under the government's auspices," he said. (fhp)