PLN in the brink of bankruptcy

President of the state-owned electricity company Perusahaan Listrik Negara (PLN) Kuntoro Mangkusubroto said that the company has suffered deficit for the past three years and it would go bankrupt unless the government injected fresh capital.

Kuntoro was quoted as saying by the Mandiri online that he had reported PLN financial condition to the Finance Minister.

Kuntoro said that during the first semester of this year, PLN suffered some Rp 11.1 trillion in losses (US$1=Rp 8,300).

He said that the losses has eroded the company's equity up to Rp 2.3 trillion. He said that the government must injected fresh capital to improve the company's financial condition.

Kuntoro said that the sharp depreciation of the rupiah against the U.S. dollar since 1997 had caused operation cost and debt burden to soar. (*)