Sinar Mas revamps its multifinance company

JAKARTA (JP): PT Sinar Mas Multiartha, a publicly-listed multifinance arm of the Sinar Mas Group, said yesterday it will change its line of business because, under its current standing, it does not comply with government rulings on multifinance firms.

Last December, the Ministry of Finance issued a regulation stipulating that a multifinance company's interest in its subsidiary must not exceed 25 percent of the latter's paid-up capital and 40 percent of the former's own capital.

Sinar Mas Multiartha currently has a 51 percent stake in publicly-listed Bank Internasional Indonesia, 100 percent in PT Asuransi Sinar Mas, 100 percent in PT Sinartama, 100 percent in PT Sinar Sekuritas and 30 percent in PT Summit Sinar Mas Finance, a joint venture with Sumitomo bank of Japan.

Fransisca Iskandar, a director of Sinar Mas Multiartha, said after an extraordinary meeting of the company's shareholders yesterday that the firm will become the Sinar Mas group's financial holding company, focusing its services on treasury management and loan arrangements.

"In line with the change of our core business, we will hand over our assets to PT Sinar Mas Multifinance, formerly known as PT Sinar Supra Finance," Fransisca said.

"The change, however, will not affect our performance because Sinar Mas Multifinance is 100 percent owned by Sinar Mas Multiartha," she added.

She said that to support the operation of Sinar Mas Multifinance, Sinar Mas Multiartha will increase its capital from Rp 5 billion (US$2.1 million) to Rp 100 billion.

Fransisca also said that as of last December, the total consolidated net assets of Sinar Mas Multiartha exceeded Rp 13.7 trillion, of which Rp 498 billion was in equity.

"We booked total revenues of Rp 1.9 trillion and net profits of Rp 142 billion last year," she added.

She said that starting from June 1, Sinar Mas Multifinance would be able to take over the factoring and leasing activities of Sinar Mas Multiartha. (alo)