Setiawan Djodi's Setdco to buy Merpati
Setiawan Djodi's Setdco to buy Merpati
Rendi A. Witular, The Jakarta Post, Jakarta
Indonesian business group Setdco Group and its foreign
partners have prepared between US$300 and $500 million to acquire
a majority stake in the financially troubled state-owned airline
PT Merpati Nusantara Airlines.
Setdco's president Setiawan Djody told reporters on Wednesday
that he had set up a consortium comprising of Setdco and Canadian
and Australian companies to take over the stake. He did not name
the Canadian and Australian firms.
"I am hoping to take control of Merpati by possessing the
majority shares in the company. We also will take over Merpati's
debts," said Setiawan.
Setiawan said the consortium had sent the acquisition proposal
to the Office of the State Minister of State Enterprises, but the
office had not responded yet.
He said the acquisition was based on an intention to boost the
performance of the company which had experienced financial
troubles for years.
Seeking to dismiss worries among the airlines' workers,
Setiawan promised that no employees would be laid off and the
current management would be kept in place if the consortium
managed to acquire the stake.
"There won't be any layoffs nor a management reshuffle. I
believe Hotasi Nababan (newly-elected Merpati president) is
capable and professional," Setiawan said.
Merpati, which is 93.5 percent owned by the government and 6.5
percent owned by national flag carrier Garuda Indonesia, has been
in financial difficulties since 1998.
The airline was forced to return three of its 14 locally
assembled CN-235 fixed-wing aircraft to state aircraft
manufacturer PT Dirgantara Indonesia, to settle its debts with
the company.
In addition, it has grounded its 11 CN-235 aircraft due to
decreasing loads, increased competition and economic woes.
The company booked a pretax loss of Rp 50 billion last year,
up from a pretax loss of Rp 187.9 billion in 2000.
It booked a pretax profit of Rp 72 billion in 1999, an
improvement from a huge pretax loss of Rp 657.7 billion in 1998.
The present value of the company's total assets is
approximately Rp 900 billion.
According to Imam Suridy, Merpati's general manager for
corporate affairs, the company has a Rp 331 billion debt with the
Indonesian Bank Restructuring Agency (IBRA) that matured in April
1. To repay the debt, the company has decided to issue medium-
term promissory notes worth Rp 300 billion.
However, he said, the government delayed approval of the plan
following the recent change in the airline' management. Investors
will only inject funds into the company, once the government
approves the plan.
"We submitted a proposal on the issuance of the notes to the
Office of the State Minister of State Enterprises in January, but
have not received a response yet," said Imam.
IBRA had promised the airline a debt haircut of up to Rp 230
billion, provided that Merpati could settle the rest of the debt,
or Rp 101 billion, on time.
Due to Merpati's failure to meet the deadline, IBRA annulled
the deal and has asked Merpati to renegotiate the debt payment.