Texmaco units operate at 20% capacity
Texmaco units operate at 20% capacity
The Jakarta Post, Jakarta
To counter a delisting threat from the Jakarta bourse,
two publicly listed units of troubled textile and engineering
conglomerate Texmaco Group announced on Friday that they were
still operating, albeit at low capacity.
The Jakarta Stock Exchange (JSX) has threatened to delist the
two companies following uncertainties over their future
operations given the protracted negotiations between their
holding company and the government and foreign creditors to
restructure the group's debts.
In a statement to the Jakarta Stock Exchange (JSX), textile
companies PT Texmaco Jaya and PT Polysindo Eka Perkasa said they
were still managing to run part of their businesses and maintain
their labor forces despite a dire need for fresh capital.
"Currently, the firm remains in operation, despite the fact
that only 20 percent of the installed capacity in its production
facilities is being utilized due to difficulties in obtaining
working capital. In the case of the fleece business, however, the
company is still operating at full capacity," said Texmaco Jaya.
The company said it expected it would be able to increase the
utilization of its production facilities if Polysindo, as the
main supplier of raw materials to the company, could increase the
utilization of its plants.
Polysindo, meanwhile, said that the utilization of installed
capacity at its purified terepthalic acid, polymer and polyester
yarn plants currently stood at between 80 percent and 90 percent.
The company also said that it could only use 60 percent of the
installed capacity at its polyester chip and polyester yarn
production facilities.
Texmaco Group, the country's largest textile company, at one
stage said it needed at least $200 million to revive its
operations and pay its overheads.
The group owes around Rp 29 trillion (US$3.4 billion) to the
government, which has been trying to sell these loan assets for
the past few years.
It also owes $1.2 billion to foreign creditors, in addition to
$52 million in tax, electricity and gas arrears.
With more than 20 subsidiaries, the group, which was founded
by an Indonesian businessman of Indian origin, Marimutu
Sinivasan, plunged into debt following the Asian financial crisis
of 1997, prompting the government to bail it out.
The Texmaco loan assets are among the few remaining unsold
assets once vested in the now-defunct Indonesian Bank
Restructuring Agency (IBRA), and are currently managed by asset
management company PT Perusahaan Pengelola Aset (PPA).
IBRA failed on a number of occasions to sell its Texmaco loan
assets following investor concerns that the assets could be
fraught with legal problems.
Elsewhere in the report to the JSX, both Texmaco Jaya and
Polysindo claimed that the debt restructuring efforts would only
impact on the ownership of the companies, not their future
operations.