18 March 2004 02:56 [Source: ICIS news]
JAKARTA (CNI)--Indonesian purified terephthalate acid (PTA) and textile company Polysindo Eka Perkasa said on Thursday its plants were operating at only 30%-40% of their installed capacity due to the company's financial difficulties.
Polysindo president director Vasudevan Ravi Shankar said the company was trying hard to raise working capital to boost output in the next few months.
Shankar said due to the low operating rate, 45% of the company's workforce were being asked to stay at home and were being paid only 75% of their normal wages.
Polysindo, part of the indebted Texmaco group, has faced major financial problems for the last few years.
The Texmaco Group, which had outstanding liabilities to the Indonesian Bank Restructuring Agency (Ibra) of Rp29trn ($3.42bn/Euro2.75bn), has recently been split into two new holding companies under a debt restructuring programme - one company for its textile and chemicals business with Polysindo as its main asset, and the other company holding its engineering assets.
Ibra, which held a 70% stake in the textile and chemical group, failed to dispose of the assets in three previous open bids because of lack of interest and low bids. Ibra has since gone into liquidation.
US fund manager Farallon Capital Asia recently signalled its interest in acquiring Polysindo's assets from the Indonesian government through its local affiliate Kinerja Prima Perkasa.
However, the source said while the company had submitted a binding final bid, Ibra had earlier cancelled the divestment, pending approval by the Financial Sector Policy Committee.
Farallon would need to invest at least $200m to revitalise Polysindo, which operates a 340 000 tonne/year PTA plant, a 330 000 tonne/year polymerisation unit, a 187 000 tonne/year polyester staple fibre (PSF) facility, and a 140 000 tonne/year polyester fibre yarn (PFY) unit at Karawang, West Java.
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