Yessar Rosendar

PPA Planning to Put Texmaco’s Rusting Assets Up for Bid Again

State asset management company PT Perusahaan Pengelola Aset is planning a second attempt to auction off the aging resources of former business giant PT Texmaco Jaya, which had an estimated value of Rp 29 trillion ($3 billion) in 2007.

“After Texmaco’s assets are appraised and we get approval from the Finance Ministry, we plan to hold an auction in the fourth quarter,” PPA president director Boyke Mukijat said.

PPA had tried to sell Texmaco’s assets in 2007, but the sale was scrapped because it failed to attract the minimum bid in the auction.

“At that time there were two bidders, but we failed to sell them because the companies bid below the price set by the Finance Ministry,” said Renny O Rorong, PPA’s corporate secretary, declining to name the companies and the minimum bid sought.

PPA could not disclose the current estimated value of Texmaco’s assets because they were still being evaluated by independent appraiser PT Satya Graha Tata in conjunction with the law offices of Marsinih Martoatmodjo Iskandar Kusdihardjo. But their worth has almost certainly fallen.

Renny said asset depreciation was likely because of the age of Texmaco’s machinery and factories.

“It is difficult to project the extent of depreciation. However, the age factor will certainly mean the assets’ value has decreased,” Renny said. The government has lost trillions of rupiah selling assets it has seized since the crisis.

Texmaco, an engineering and textile firm, was previously owned by Indian tycoon Marimutu Sinivasan. The company suffered serious financial difficulties in the wake of the 1997-98 Asian financial crisis.

The Indonesian Bank Restructuring Agency bailed the company out in 2001, at a total cost of $2.7 billion.

By 2003, the giant company’s debt to the government had swelled to $3.7 billion. The same year, it defaulted on a loan from PT Bank Nasional Indonesia.

As a result, the company’s assets — heavy machinery and textile and auto parts factories — were seized by the government.

Meanwhile, Sinivasan fled the country and became a fugitive from his debts. He was arrested when he returned to the country last year.

In 2004, the Finance Ministry transferred the company’s assets to PPA, which established separate holding companies for Texmaco’s textile and engineering divisions.

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