UT sells Komatsu stake to pay debilitating debt

The Jakarta Post, Jakarta

Publicly listed heavy-equipment supplier PT United Tractors (UT) has sold a 13 percent stake in PT Komatsu Indonesia to Japan's Komatsu Ltd., the world's second-largest producer of construction machinery, to raise money for repaying debt.

In a press statement on Monday, UT said Komatsu had paid a total of Rp 97.31 billion (US$10.7 million) for the stake, reducing UT's entire stake in Komatsu to only 5 percent from the previous level of 18.28 percent.

Komatsu Indonesia assembles and makes heavy equipment under license from its parent, with UT acting as the sole distributor for Komatsu heavy equipment in Indonesia. UT is 52 percent controlled by the country's largest automotive firm, PT Astra International.

UT, which has a 40 percent market share of the domestic heavy equipment market, has been trying hard to repay its current debt of $175 million.

Due to the debt, the company has stopped paying dividends and expanding since 1997, when it recorded losses of Rp 298 billion as a result of the Asian financial crisis.

UT's shares on the Jakarta Stock Exchange declined Rp 25 to Rp 1,475 on Monday