Sempati Air shakes up management to go public

JAKARTA (JP): Sempati Air, the country's largest private airline, announced a major management reshuffle yesterday to mend its ailing financial performance.

Sempati chief commissioner Hutomo Mandala Putra said the reshuffle, approved by shareholders early this week, would improve the company's performance.

Hutomo, affectionately called Tommy, acknowledged the airline had financial problems, but he refused to explain them.

Tommy, President Soeharto's youngest son, said the reshuffle was part of a major restructuring plan to prepare for an initial public offering (IPO) next year.

The shareholders appointed Santun Nainggolan as president replacing Hasan M. Soedjono, who failed to implement the airline's plan to go public on local stock exchanges two months ago, Tommy said.

Santun, 39, graduated from Bandung Institute of Technology (ITB), and is a former vice president of Citibank. He was a director of PT Pentasena Arthasentosa and PT Wartaartha before his new job.

The shareholders replaced commercial director Hasan, who was also the president, with Arie Johannes J. Toelle of the Humpuss group.

The technical division was merged into the operations division.

Sempati Air announced a plan in April to list between 15 percent and 20 percent of its shares this year. The IPO was expected to raise around Rp 350 billion (US$148 million).

The IPO was delayed because of the airline's poor financial performance.

Tommy said the new management's primary task was "to carry out an internal consolidation" to put the airline's performance back on track.

"With this measure, we hope the public offering plan will be realized next year," he said. "Sempati Air does not want to disappoint the public, so it will only go public after its business performance has improved," Santun said.

Sempati Air is 25 percent owned by Malaysian consortium Asian Aviation Inc (AAI), 22.5 percent by the Indonesian army's PT Tri Usaha Bhakti (Truba), 20 percent by PT Humpuss and 20 percent by Bob Hassan.

Before AAI bought into the firm several months ago, it was 40 percent owned by PT Truba, 35 percent by PT Humpuss and 25 percent by Bob Hassan.

Santun said shareholders had strong reservations on the reports from the firm's auditor, and they had appointed another auditor to assess the airline's balance sheet.

Tommy said Singapore Airlines and other major airlines were keen to buy Sempati shares.

"But the shareholders are still reluctant to accept their offers," he said.

Tommy said Sempati Air's main goal was to beat Singapore Airlines as the biggest airline in Southeast Asia.

PT Pefindo, the country's only rating agency, said recently it was reviewing the A4 rating it had assigned to the airline's Rp 50 billion commercial paper because of its falling operational revenue. (jsk)