Soedarmo stays on board as Dirgantara president

Soedarmo stays on board as Dirgantara president

Evi Mariani, The Jakarta Post, Jakarta

The new controlling owner of ailing state-owned aircraft maker PT
Dirgantara Indonesia surprisingly decided to retain Edwin
Soedarmo as the company's president, although the other board
members were mostly new faces.

The decision was made during a shareholders' meeting on Friday
at the headquarters of the Indonesian Bank Restructuring Agency
(IBRA), the new owner of the company.

Around 150 employees of Dirgantara from Bandung, the home base
of the company, held a demonstration in front of the agency to
protest an earlier decision to dismiss some 6,000 employees.

IBRA, a government agency mandated to take over non-performing
loans from troubled banks during the 1997 financial crisis, now
owns 92.9 percent of Dirgantara after converting the latter's
debt of Rp 1.77 trillion into equity participation. The remaining
shares are held by the government.

Edwin had received strong criticism from the company's
employees and some top management officials for proposing the
mass dismissal of workers, which was approved by the government
earlier this week, as part of an overall restructuring program to
help the company lift itself out of years of financial
difficulties.

Dirgantara has said it would retain 3,673 workers through a
reselection process.

IBRA Chairman Syafruddin Temenggung defended the decision to
retain Edwin, saying that he was deemed professional and
committed to the company.

The shareholders created a new vice president's position in
the management to help with Dirgantara's restructuring program,
particularly to consolidate the company, which will focus on only
four core businesses out of its current 28. The four are:
aircraft assembly, parts and component manufacturing, maintenance
operation and engineering services.

IBRA installed one of its senior staff, Rudhy M. Mokobombang,
as Dirgantara vice president.

The agency also installed Iwan W. Soemekto as the new director
of commerce and business development, and Andung A. Nitimihardja
as a commissioner.

The rest of the directors and the commissioners were appointed
from Dirgantara, the government bureaucracy and professionals.

After winning a debt restructuring facility from IBRA,
Dirgantara will now focus on raising $39 million in fresh loans
to help finance ongoing projects with the Pakistani Air Force,
British Aerospace Engineering and the Indonesian Air Force.

Edwin said at a Friday press conference that state-owned Bank
Mandiri was ready to provide part of the loans.

Before the shareholders' meeting, IBRA deputy for asset
management and credit Mohammad Syahrial had said besides Bank
Mandiri, Dirgantara could also seek loans from other
institutions, using its assets as collateral.

Dirgantara said it had assets worth $61 million, comprising of
unsold products, real estate and property in West Java and
subsidiaries.

Syafruddin explained during the meeting that should IBRA be
closed down early next year (the agency was set up in 1998 with a
five-year mandate), full ownership of Dirgantara would be
returned to the government. He declined to reveal future options
regarding this matter.

Dirgantara, formerly known as PT Industri Pesawat Terbang
Nusantara (IPTN), was established in the 1980s by B.J. Habibie,
former technology and research minister under the Soeharto era.

The company has been struggling financially for many years,
which had forced previous governments to provide a bailout
facility to keep it afloat.

Board of Directors

President : Edwin Soedarmo (Dirgantara)
Vice president : Rudhy M. Mokobombang (IBRA)
Finance director : Hidayat Hasan (Professional)
Technology director : Mohammad Mochajan (Dirgantara)
Operation/
production director : Budi Wuraskito (Dirgantara)
Supporting director : Muhammad Nuril Fuad (Dirgantara)
Commerce and
business director : Iwan W. Soemekto (IBRA)