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.