Bhakti bails out on Adam Air

The Jakarta Post ,  Jakarta   |  Sat, 03/15/2008 11:56 AM  |  Business

A business unit of PT Bhakti Investama and a business consortium, Bright Star Perkasa, plan to bail out on their investments in budget carrier PT Adam Skyconnection Airlines and sell their shares back to the carrier's founders, Suherman and Sandra Ang.

"Together with Bright Star consortium, we have signed a memorandum of understanding with Suherman and Sandra Ang for the buying back of our shares," Global Transport Service (GTS) financial director Erwin Andersen told The Jakarta Post on Friday.

GTS, a subsidiary of Bhakti Investama, has owned a 19 percent shares in Adam Air since April. Bright Star consortium holds a 31 percent stake, while the airline's founders, Suherman and Sandra Ang, own the remaining 50 percent.

Adam Air president director Adam Suherman, the son of Suherman and Sandra, denied Erwin's claim there was an agreement to acquire the GTS and Bright Star shares.

"As the management of the company, we have not received any notification about their plans except from the news. We are deeply shocked by it.

"However, I can confirm that our shareholders, Suherman and Sandra, never approved such a plan," Adam said.

Adam said that if Bhakti and Bright Star did plan to sell their shares, they would be running away from their responsibility to keep the airline in operation amid internal financial problems.

"The airline's cash flow is in trouble. A few weeks back I asked for financial support from all the shareholders, but received no response whatsoever from GTS and Bright Star," Adam said, speculating this was the reason behind their reported share divestment plan.

Asked about the response from management, Adam said they would look for loans to keep the planes in the air and to protect the airline's some 3,000 workers.

"I can't imagine how a respected company like Bhakti can bail out just like that from its investment. I can't tell whether we as a company can take legal action but our workers can," Adam said.

GTS representative in Adam Air, Gustiono Kustianto, currently a vice president overseeing financial affairs at the airline, said both GTS and Bright Star had acted on his recommendations after managing the company for 10 months.

"We joined Adam Air back in April just after the airplane crash in Makassar and rescued the company from a deep financial crisis.

"Apparently, the company has now fallen into another cash flow problem. This means something is wrong at the operational level. Though I'm a financial director here, I'm not allowed to audit the operational spending," Gustiono said.

He also said there was a dispute over priorities in the company. "We at GTS place safety above commercial benefits."

An Adam Air airplane carrying 177 passengers recently skidded off the runway during heavy rain on its second landing attempt at Hang Nadim airport in Batam, Riau Islands province.

Last year, Adam Air suffered two accidents, including one on Jan. 1 when one of its Boeing 737-400s with 102 people on board crashed off the coast of South Sulawesi. No bodies were recovered.

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