Indon's Texmaco looking to sell non-core assets

30 October 2002 03:42  [Source: ICIS news]

SINGAPORE (CNI)--Indonesia's Texmaco Group is looking at selling some of its non-core assets, including lifestyle businesses such as shoes, as part of a new strategy to generate working capital and raise funds to strengthen its core businesses, including chemicals.

One way of strengthening the group's chemicals business would be to debottleneck existing production lines, a source close to the group told CNI's sister publication ACN.

Texmaco's chemical businesses are currently run by its subsidiary, Polysindo Eka Perkasa.

The new strategy would only be implemented after Polysindo finalises a bond-restructuring plan, the source said. Earlier this year, the company for the third time delayed the implementation of a final plan to restructure the company's US$450m un-secured bonds by 2-3 months to end-2002.

Polysindo's debt-restructuring efforts began in August 1998, when the company first went into default with debt totalling $1.13bn. The company's domestic debt has been taken over by the Indonesian Bank Restructuring Agency.

As part of the new growth strategy, the Texmaco group would categoriseits businesses into core and non-core, the source said. Textiles, heavy engineering and steel would be included in the group's core businesses, the source added. But he would not disclose the other potential core businesses.

The purified terephthalic acid (PTA)-to- polyester producer posted an operating loss of Rp298.6bn ($32.4m/Euro32.9m) in H1 2002 compared to H1 2001, largely on a sharp drop in sales. Its consolidated sales fell by 11.5% to Rp1.89trn in H1 2002 from Rp2.14trn in H12001.

The company recorded a net profit of Rp1.60trn in the first half against a net loss of Rp216.2bn in the previous year, almost entirely due to foreign-exchange gains of Rp2.1trn as against the loss of Rp2.3trn it booked in the first half of 2001.

The company operates a 340000 tonne/ year PTA plant to support its downstream operations in staple fibres and fibre yarns.

By: Prema Viswanathan
+65 6780 4359

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