Pudjiadi sells assets to pay foreign debts

JAKARTA (JP): Publicly listed hotel operator PT Pudjiadi & Sons Estates Ltd. is selling its property assets in the U.S. to pay its foreign debts.

The company's shareholders agreed Feb. 13 to the company's proposal to sell its assets in Texas -- the 20,400 square meter Twin Sixties Tower office building, the 228-room, four-star Hotel Radisson in central Dallas and 5 hectares of land -- to Whitehall Street Property Fund, an affiliate of U.S. investment bank Goldman, Sachs & Co.

Pudjiadi & Sons corporate secretary Ario Tedjo told The Jakarta Post yesterday that the company would sell the properties for a total of US$27 million.

"The MOU (memorandum of understanding) has been signed," he said.

He explained that more than half of the proceeds would be used to pay for the company's U.S. dollar-denominated debts.

Currently, Pudjiadi & Sons owes $6.5 million to U.S. investment bank Prudential and a total of $10.6 million to PT Bank Interpac, PT Bank Niaga, GHF Hongkong and Daiwa Bank's Jakarta office.

"We don't have any rupiah loans," he said.

The company expects its 1997 financial results to be affected by its foreign debt exposure due to the sharp depreciation of the rupiah against the U.S. greenback.

Ario said that with an exchange rate of Rp 4,650 to the dollar, the company's financial losses would total Rp 16 billion.

The rupiah fell to Rp 9,700 to the U.S. dollar yesterday, compared to its Rp 8,200 closing before the weekend.

He also said the economic crisis has affected the company's hotel business, pointing out that during the 1997 pre-crisis high season, its hotels had an average 65 percent occupancy rate, compared to a Jan. 1998 rate of about 35 percent.

"The crisis has slashed arrivals of Asian tourists, who are our main customers," he said.

He added that last year's haze problems, as well as political issues, has affected European tourist arrivals.

The Ministry of Tourism, Post and Telecommunications has reported that foreign tourist arrivals in Indonesia rose by a mere 5.04 percent last year to 5.03 million visitors, below its 5.3 million target.

Minister Joop Ave attributed the small number to the monetary crisis and the fires.

Pujiadi & Sons is 84 percent controlled by the Pudjiadi family, which also owns listed property firm PT Pudjiadi Prestige.

The latter is one of 17 property companies recently downgraded by PT Pefindo, Indonesia's only rating agency, because of the firm's foreign currency obligations. (08)