18 December 2009 11:47 [Source: ICIS news]
TOKYO (ICIS news)--Japanese chemical producer Teijin is to sell its 98% stake in filament yarn and staple fibre subsidiary PT Teijin Indonesia (TIFICO) to four firms due to its low profitability, the company said on Friday.
Teijin concluded an agreement on Friday to transfer its stake in TIFICO to PT Prospect Motor, PT Hermawan Sentral Investama, PT Wiratama Karya Sejati and Pioneer Atrium Holding for an undisclosed sum, the producer said.
The company did not disclose the ratio of the stake that each company would hold.
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As a result of the sale, Teijin would incur an extraordinary loss of yen (Y) 16bn ($178m), and the company expected its net income for the full fiscal year 2009, ending 31 March 2010, to decrease by Y5bn.
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“However, TIFICO’s polyester fibres operations have come upon hard times amid intensified competition in the industry, especially from Chinese competitors since around 2000,” the producer said.
Under the circumstances, Teijin took various measures to revitalise TIFICO, including expanding the manufacturer’s exports to
Although these initiatives improved TIFICO’s financial performance, the subsidiary did not achieve expected levels of profit, thus the company decided to sell its stake, Teijin said.
The move was part of Teijin’s ongoing restructuring of its polyester fibres business, the producer added.
After the sale, Teijin would maintain a close relationship with the producer, and would continue to purchase filament yarns and staple fibres from TIFICO, Teijin added.
The tentative date of the share transfer is 15 April 2010, according to Teijin.
Teijin’s financial outlook for fiscal 2009, including the effects of the share transfer, would be disclosed when it announces its third-quarter financial results, scheduled for early February 2010, the company said.
($1 = Y89.90)
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