Texmaco Group seeks listing on Nasdaq

JAKARTA (JP): The widely diversified Texmaco Group said Tuesday it would list some of its subsidiaries on the New York- based over-the-counter stock market Nasdaq to raise funds for payment of the group's overseas debts worth about US$1.4 billion.

The group's Chairman Marimutu Sinivasan said here on Tuesday the subsidiaries which would be listed on Nasdaq would include PT Polysindo Eka Perkasa and PT Texmaco Perkasa Engineering, which are listed on the Jakarta Stock Exchange.

Polysindo is the country's largest integrated textile industry while Texmaco Perkasa is in the machinery and engineering industry.

"The listing (of the group companies' shares) on Nasdaq will be made after we have finished our debt rescheduling negotiations, which are scheduled for conclusion in July. So we hope the listing can be realized by the end of this year," Sinivasan said in a news conference.

He said the Nasdaq listing would also be made to protect the business group's subsidiaries from being taken over by other companies at low prices.

Many foreign companies were now targeting to buy debt-laden but promising companies at cheap prices here, he said, adding that prices of most shares listed on the local stock exchange have been undervalued due to the lack of interest from buyers.

By listing on Nasdaq, the companies' shares would be more liquid and the prices more realistic.

Sinivasan said the overseas listing would be one possible way out in coping with the business group's mounting overseas debts.

Polysindo announced earlier that it was in the final stages of preparing a comprehensive restructuring proposal for its $1.4 billion debt, with a final agreement expected by August.

He said that the group would use the debt equity swap for coping with its domestic debts.

However, Sinivasan refused to reveal the amount of Texmaco's foreign and domestic debts.

Several of Texmaco's subsidiaries, including PT Texmaco Perkasa Engineering and PT Polysindo Eka Perkasa are among the 164 biggest debtors at Bank Negara Indonesia.

Sinivasan said Texmaco also planned to establish five or six garment factories in the country within the next two years to boost its garment exports.

He said that Texmaco expects to increase its garment export to $30 million per month in the next two years from the current $12 million per month.

Sinivasan said Texmaco currently exports 60 percent of its textile and textile-related products to compensate the sluggish domestic demand.

Before the economic crisis hit the country, Texmaco exported only 35 percent of its products.

He said Texmaco has also expanded its business to Tunisia, Northern Africa and Eastern Europe.

"With the increase in production capacity, both in domestic and overseas plants, we expect our textile and garment exports could reach $500 million this year," Sinivasan said, adding that the figure was expected to reach $750 million within the next three years.

He said despite the downturn in the international prices of textile and textile-related products, the business still promised to consider the huge size of the textile market. (gis)