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Sinking shipyard PAL to float on $60 million loan
State-owned PT PAL Indonesia, the nation's largest shipyard, expects to receive US$60 million in loans that will be arranged by state asset management firm PT Perusahaan Pengelola Aset (PPA)
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State-owned PT PAL Indonesia, the nation's largest shipyard, expects to receive US$60 million in loans that will be arranged by state asset management firm PT Perusahaan Pengelola Aset (PPA).
PAL is currently under a strict supervision from PPA in a restructuring program aimed at avoiding the company from closing.
PAL president director Harsusanto said on Thursday the loan would have a maturity period of 3.5 years and would be used for repairing equipment and dock facilities.
"We hope to receive the loan by December. But we realize the current economic situation is not very encouraging," he said.
PAL will still then need another $30 million injection to make it viable enough to keep going.
"We will try to get that money from other sources," He said at the Office of the State Ministry of State Enterprises.
PAL has been in financial trouble since it received a contract for the construction of 20 vessels, about two years ago, but at a fixed price. While costs of ship construction soared since that time, PAL could not adjust the production costs covered.
Secretary to the State Ministry of State Enterprises Said Didu said PAL still had a long way to go before receiving the loan.
"We must ensure first that companies under the PPA restructuring program have adequate cost-saving measures. We have asked PAL to revaluate several of their real expenses," he said.
Said cited the case of ailing state airline Merpati Airlines Nusantara, which requested a loan of Rp 560 billion (around $56 million), but then cut the request to Rp 300 billion after the government told the company to recalculate its expenses.
According to Said, there will be established a restructuring and revitalizing committee in PPA to ensure that any company requesting a government-sponsored loan is fit for such a facility and that the restructuring program will be carried out accordingly.
"The committee's members will be recruited from the ministry, the Finance Ministry and representatives from several related technical ministries," he said. (dis)
