Sinking Dok Kodja calls for govt bailout
Sinking Dok Kodja calls for govt bailout
Evi Mariani, The Jakarta Post, Jakarta
Hundreds of workers of sinking state-owned shipyard company PT
Dok Kodja Bahari are demanding that the government swap the
company's huge debts with the Indonesian Bank Restructuring
Agency (IBRA) and the Ministry of Finance into equity
participation in the company.
They made the demand during a rally outside the Office of the
State Minister of State Enterprises in Jakarta on Monday. About a
dozen delegates were invited in to meet top ministry officials.
Dok Kodja's workers union stated that the company was saddled
with some Rp 2.14 trillion (US$251 million) debts, of which Rp
1.2 trillion was owed to IBRA, Rp 300 billion to the Ministry of
Finance and the remainder to a number of suppliers and other
creditors.
They have urged IBRA and the Ministry of Finance to agree to a
debt-to-equity swap mechanism instead of selling the debts to
private investors. Workers fear that the entry of a new private
owner would result in a massive dismissal.
Many state-owned companies are considered inefficient partly
due to the huge number of people with low productivity that they
employ.
Responding to the union's demands, deputy for commercial
service affairs at the Office of State Minister of State
Enterprises Suhendro said the workers should have approached IBRA
and the Ministry of Finance to settle the matter, instead of
going to his office.
However, he promised to discuss the matter with ministries
relevant to the shipyard.
The union said the company was facing difficulties in
acquiring new contracts.
"Because of our company's negative balance sheet, clients are
looking elsewhere. They prefer other shipbuilders," a worker read
from a statement prepared by the union.
The union also said the shipyard's bad debts had prompted
suppliers and subcontractors to ask for higher prices, leading to
high-cost production.
Since the late 1990s economic crisis, Dok Kodja has faced a
number of bankruptcy petitions filed by creditors because of its
failure to repay maturing debts.
In 2000, the Hongkong Chinese Bank, Ltd. filed a bankruptcy
suit against Kodja for US$3.5 million in promissory notes that
matured in early 1998.
The company reportedly survived three bankruptcy suits
previously on a mere technicality.
The core business of the company, whose major assets are its
shipyards, are building various kind of ships.
In 1996, Kodja made a large vessel worth $55 million, ordered
by Swedish company Raderi AB Gotland. Reportedly, the vessel
could transport 200 trailer trucks and 200 passengers.