Sinivasan ready to release large stake in Texmaco

Sinivasan ready to release large stake in Texmaco

JAKARTA (JP): The majority shareholder of the giant Texmaco
Group, Marimutu Sinivasan, said on Wednesday that he was ready to
release his controlling stake in four of its publicly listed
subsidiaries to help restructure their total debts of US$2.291
billion.

Sinivasan said that the transfer of his majority ownership in
the four subsidiaries was one of several debt settlement
alternatives proposed to creditors.

He said that negotiations on the debt restructuring proposals
were underway and he hoped that agreement could be achieved by
September of this year.

The four companies are engineering company PT Texmaco Perkasa
Engineering, automotive manufacturer PT Wahana Jaya Perkasa, and
textile companies PT Polysindo Eka Perkasa and PT Texmaco Jaya.

"Many owners of foreign companies now hold minority stakes,
it's very common, and I think we should follow this course," he
told reporters at a public presentation in the Jakarta Stock
Exchange.

The public expose followed the disclaimer opinion by public
accountants on all four subsidiaries' financial performances.

However, Sinivasan added that a debt to equity swap was only
one of many options during negotiations with creditors.

"A haircut is quite possible and maybe we'll find a strategic
investor," he explained.

He claimed that an oil and gas company from Saudi Arabia had
already expressed interest in investing in Wahana and was waiting
for the outcome of the company's debt restructuring talks.

The business group was at a center of a loan scandal in late
1999 involving $754 million and Rp 1.9 trillion ($220 million) in
preshipment export facilities.

Texmaco obtained the loan facilities between November 1997 and
February 1998 from Bank Indonesia through state owned Bank Negara
Indonesia (BNI) and Bank Rakyat Indonesia (BRI), thanks to
alleged intervention by the then president Soeharto.

Sinivasan was named a suspect but the Attorney General's
Office later halted the case because of a lack of evidence.

IBRA has appointed Deloitte & Touche Tohmatsu, Jakarta, to
conduct due diligence on the four companies as part of the debt
restructuring program.

Some $868.8 million of the four companies' $2.2 billion debts
is owed to the Indonesian Bank Restructuring Agency (IBRA), which
took over the loans from local banks.

Texmaco's largest indebted subsidiary is Polysindo, with debts
amounting to $1.52 billion, of which $684 million are in the form
of secured Yankee Bonds and $456 million in unsecured commercial
paper.

Texmaco Perkasa ranks second with debts totaling $496 million,
of which $355 million is being restructured by IBRA.

Sinivasan declined to further elaborate on the debt
restructuring process, saying that it would affect current
negotiations.

But he expressed confidence that he could pay off his debts
given the value of his companies' assets .

He claimed that the assets of Polysindo and Texmaco Jaya alone
were worth over $1.8 billion according to foreign appraisals.

Texmaco further asserted that business prospects for its four
subsidiaries were promising due to forecasted improvements in
their respective markets. (bkm)