Timah to raise funds by selling assets
Timah to raise funds by selling assets
Moch. N. Kurniawan, The Jakarta Post, Jakarta
Ailing publicly listed tin-mining firm PT Timah announced on
Thursday it would sell assets worth Rp 200 billion (US$20
million) in 2002 and 2003 to recover from its serious financial
problems.
Timah president Erry Riyana Hardjapamekas announced on
Thursday the company hoped to obtain Rp 100 billion this year and
another Rp 100 billion next year from its asset sales program.
"We plan to sell our assets that have not been of much benefit
to us. We will first focus on selling fixed assets that are quite
promising rather than our shares in several companies," he told a
media briefing.
He said Timah's property on Jl. Merdeka Timur 15, Jakarta,
estimated at Rp 70 billion, a golf course and a diesel oil-fired
power plant in Pangkal Pinang, Bangka Belitung province, would be
among its fixed assets to be sold. He did not specify the
location of the golf course.
Its shares in tin-mining firm PT Koba Tin, gold-mining firm PT
Kutaraja Tembaga Raya, insurance firm PT Asuransi Tugu Mandiri
and Singapore-based machinery spare parts manufacturer Plimsoll
would also be sold to raise another Rp 50 billion, he added.
According to Erry, the assets sales program is part of the
company's cost-cutting measures to cope with its financial
difficulties.
The assets sales program is part of the company's rescue
program that is awaiting approval from its extraordinary general
meeting of shareholders next week.
Timah has suffered financial woes since last year following
the drop in tin prices on the international market.
The company blamed widespread illegal mining in Bangka
Belitung province for oversupplying the tin market and
dragging the price of the commodity down.
Over the past several years, illegal miners have produced
40,000 metric tons of tin ore per year, near equaling Timah's
production.
The company has taken several cost-cutting measures, including
reducing working hours to prevent the company from going
bankrupt.
It also called on the government to ban tin ore exports from
the island to curb illegal mining. But the government only
responded earlier this year by issuing a decree to ban tin ore
exports from both islands
The decree will only allow the export of tin that is produced
by Timah and Koba Tin.
Timah received an average price of $4,408 per metric ton of
tin last year, compared with $5,520 per metric ton in 2000.
Last year, Timah's net audited profit stood at Rp 36.78
billion, down from Rp 331.6 billion in 2000.
Erry also said the company promised not to cut its workforce
this year, backing down on its earlier plan to shed 70 percent of
it 5,200 workers.