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.