Semen Padang asks for Rp 300 billion from Mandiri
The Jakarta Post, Jakarta
State-owned cement producer PT Semen Padang, a subsidiary of the country's largest cement manufacturer, PT Semen Gresik, has asked for a Rp 300 billion (US$35.2 million) loan from Bank Mandiri to refinance its swelling short-term debt.
The president of Semen Padang, Dwi Soetjipto, said the bridging loan would be used to plug the company's short-term debt, amounting Rp 560 billion.
"Bank Mandiri has pledged to provide us with a bridging loan of Rp 300 billion," Dwi was quoted by Antara as saying over the weekend.
He said the huge debt was accumulated because the previous management had postponed payments on the company's debt to its suppliers, while at the same time seeking a new loan from state- owned insurance firm PT Jamsostek to cover its long-term debt.
He also said some of the loan pledged by Mandiri would be used to help restore the company's liquidity, which was weakened by a protracted conflict between its previous board of directors and stakeholders.
Currently, the company's liquidity is only 70 percent of its total debts, while its working capital has a deficit of Rp 170 billion.
"A healthy company should have a liquidity ratio of more than 100 percent .... Restoring the company's liquidity has become a priority because it will be difficult to operate properly without refinancing," said Dwi.
Dwi took over the leadership of Semen Padang in September this year after a prolonged struggle by its holding company, Semen Gresik, to regain control of the firm. Dwi, who was appointed by Semen Gresik to take over the running of Semen Padang from the previous management, was only able to enter the firm's office in Padang, West Sumatra, under the protection of hundreds of police and military personnel.
Publicly listed Semen Gresik has three subsidiaries: Semen Gresik, Semen Padang and Semen Tonasa.
The previous directors of Semen Padang, supported by local politicians and some employees, for more than two years were engaged in a dispute with Semen Gresik over the government's plan to sell a majority stake of Semen Gresik to Mexico's Cemex SA de CV.
They were opposed to a foreign investor controlling Semen Padang through Semen Gresik, and demanded that Semen Padang be spun off from Semen Gresik.
Due to the dispute, Semen Gresik had difficulty filing its 2002 financial report because Semen Padang refused to provide its financial details.
Dwi said one of the company's main tasks was to finalize its financial report for the 2002 fiscal year so that Semen Gresik could finish its consolidated 2002 financial report by December, after missing a September deadline.
However, despite the financial problems, Dwi expressed optimism the company would reach its sales target of 4.7 million tons of cement in 2003.
As of October, the company's sales reached 3.87 million tons.