Texmaco, up for sale, misses interest payment
Texmaco, up for sale, misses interest payment
Bloomberg, Jakarta
Texmaco Group, Indonesia's biggest textile maker, missed a
payment on US$3.4 billion of debt due to a state agency that's
trying to sell its stake in the group, a spokesman for the
Indonesian Bank Restructuring Agency (IBRA) said.
Texmaco, which last year agreed to reorganize its Rp 29
trillion ($3.4 billion) debt to the agency, missed a Rp 139
billion interest payment due on Aug. 18, IBRA spokesman
Raymond Van Beekum said, confirming an earlier report in the
Koran Tempo newspaper. The company has 30 days to make the
payment before it's declared in default.
The missed payment could overshadow a bank restructuring
agency roadshow in London, Hong Kong, Singapore and Kuala Lumpur
this week to spur investor interest in Texmaco, PT Bank Lippo and
other Indonesian companies. The government is selling assets to
recoup funds spent bailing out banks after the 1997-1998 Asian
financial crisis, and to plug its budget deficit.
"It's a business that with the right balance sheet could be
quite valuable," said Robert Appleby, Hong Kong-based chief
investment officer of ADM Capital's Galleus Fund, which has about
$120 million invested in Asian debt. "If properly managed and
restructured it could be in good shape. But it's been off
people's radar screens for a while now."
Appleby said he recently sold his holdings of Texmaco debt.
The bank agency last month failed in an attempt to sell
Texmaco's debt and shares after Malaysia's Utara Capital Ltd., a
group led by the eldest son of Malaysian Prime Minister Mahathir
Mohamad, and China National Bluestar Corp., a state-owned
enterprise, didn't submit final bids by the deadline. IBRA is
also trying to sell its equity stake in the company.
Texmaco Group's spokeswoman Nina Kairupan did not return
calls.
Texmaco owes a total of $3.4 billion to the bank restructuring
agency. It also owes at least $1 billion to foreign
bondholders, a debt that has not been restructured, including
about $700 million owed by its main textile unit, PT Polysindo
Eka Perkasa.
"If it fails (to make payment by) Sept. 18, all claims
become due and payable," Van Beekum said.
Texmaco was founded by Marimutu Sinivasan, a businessman of
Indian descent. Sinivasan was one of the few successful
businessmen of the Suharto era who wasn't Indonesian-Chinese in
background.
Texmaco's debt restructuring negotiations dragged on for
several years after the Asian financial crisis, until it signed a
debt rescheduling agreement with the Indonesian Bank
Restructuring Agency in August of last year. The first interest
payment under that agreement was scheduled for Aug. 18.