Merpati needs investors: Laksamana
Tony Hotland, The Jakarta Post, Jakarta
The fate of state-owned carrier PT Merpati Nusantara Airlines and its some 4,000 employees might be "at stake" following the House of Representatives' decision to put off the privatization of the ailing airline, State Minister for State Enterprises Laksamana Sukardi said on Thursday.
Speaking during a four-hour session with House Commission IX on financial affairs, Laksamana said privatization was part of attempts to rescue the airline.
"Merpati has been suffering constant losses. They lost Rp 10 billion per month in 2003 and they've been losing an average of Rp 21 billion per month in 2004. And as Pak Hotasi said, their cash flow might allow them to operate probably only for the next three months," he said.
Minister of Finance Boediono and Merpati president Hotasi Nababan also attended the hearing.
Merpati has Rp 1.3 trillion (US$139.93 million) in debts, with assets standing at about Rp 775 billion.
Among the major creditors are the government (Rp 225 billion), Bank Mandiri (Rp 230 billion) and national flag carrier Garuda Indonesia (Rp 246 billion).
According to Merpati's financial report, it experienced a Rp 247 billion loss during the first seven months of the year.
"But if (House members) say that we must postpone the privatization plan, what can we do? But we must now face and explain this to Merpati's 4,000 employees, who have also been pushing us to seek a way out," Laksamana said.
The government initially planned to sell about a 49 percent stake in Merpati to strategic investors later this year (the government will sell up to a 51 percent stake if the buyers are local investors).
Several commission members, who expressed their reservations about the privatization, questioned the effectivity of a strategic sale when Merpati is struggling under such massive debts.
They also doubted whether the new investors would preserve Merpati's core business, which is serving routes in eastern parts of Indonesia.
The commissioners agreed that Merpati's management should first complete the conversion of the government's debts into equity (debt restructuring), saying that was the most feasible option for the time being.
Looking disappointed after the session, Hotasi declined to answer journalists' questions.
The coordinator of Merpati's privatization program, Hariadi Soepangkat, said the House should not be concerned about the effectiveness of the privatization plan.
"We have to do it now before everything's too late. Many local and foreign investors have expressed their interest, mostly from the Southeast Asian region. Some local cigarette producers have also approached us, like Sampoerna and Djarum, who want to diversify their businesses," he said.
Hariadi added that a strategic sale would help Merpati get fresh funds in order to turn its equity positive, which would boost its value for a planned initial public offering in 2006.