Resources Prima lay off workers in RI coal operations
Wednesday, August 16 2017 - 02:42 AM WIB
SGX-listed coal mining firm Resources Prima Group Limited has laid off workers at its coal operations in Indonesia following production suspension and lingering uncertainty about its future.
Resources Prima said in a statement Tuesday that after the operations of PT Energy Indonesia Resources (EIR), a subsidiary of the group which mainly provided coal hauling services to the group?s coal mining operation, have been suspended, it has offered a voluntary severance package to all 96 employees of EIR in order to significantly reduce its current operating expenses and cash outflows.
?All employees have accepted the offer,? the company said, adding that the voluntary severance package shall result in the group making a one-off non-recurring payment to the employees of approximately US$126,000 net of tax during the financial year ending December 31, 2017.
?As and when required, the group will look to re-engage certain employees or contract workers on revised terms in order for EIR to meet any administrative obligations,? it added.
Resources Prima last month also said that following further reviewed of the operating environment of its main operating subsidiary, PT Rinjani Kartanegara in Kutai Kartanegara in East Kalimantan, and given that there is currently no certainty as to whether mining operations will recommence, the company has taken the decision to offer a voluntary severance package to all of Rinjani?s employees in order to significantly reduce its current operating expenses and cash outflows.
The company said ll employees of Rinjani have accepted the offer, and that the voluntary severance package shall result in the group making a one-off non-recurring payment to the employees of approximately US$800,000 net of tax during the financial year ending December 31, 2017.
Elsewhere, the company said that it has met representatives of its mining contractor PT Cipta Kridatama (CK) to negotiate the recommencement of waste mining operations and to reschedule all amounts owed to CK. However, management has been advised by CK that it would not recommence waste mining operations unless full payment of the current outstanding debt comprising waste mining costs and equipment rental costs owed to CK by Rinjani, amounting to approximately US$2.5 million is made. ?As such, the Group has approached and is continuing discussions with alternative waste mining contractors,? Resources Prima said.
Regarding tax issue, the company said it has reviewed the tax assessment findings for 2013 by the Indonesian tax authority which form the basis of the tax demand of approximately US$5.0 million. ?Advice has been obtained from professional tax advisors and a formal response to the Indonesian tax authority is expected to be submitted in due course.?
Following the cessation of all coal production from Rinjani?s mine site (as previously announced), the operations of RPG Trading Pte. Ltd. and PT Energy Indonesia Resources, which are dependent on coal produced by Rinjani, have also been suspended.
In June, Resource Prima said that Rinjani has stopped mining operations since June 23, due to inability to meet financial obligation to CK, its mining contractor.
The company said Rinjani was unable to pay contractor PT Cipta Kridatama (CK) on time as coal production and sales were reduced due to rainfall and dewatering problems at the mine.
Meanwhile, creditors of Resources Prima have filed with the Jakarta Commercial Court a suspension of debt payment obligations (better known here as PKPU) to help avoid liquidation of the company. The court hearing was scheduled to be held on August 14.
PKPU is part of Indonesia's 2004 Bankruptcy Law and provides creditors and debtors with an avenue to avoid liquidation bankruptcy. A PKPU gives a debtor the opportunity to prepare, negotiate and submit a composition plan to its creditors for their approval. The PKPU can be either initiated by the debtor or creditors.
Editing by Reiner Simanjuntak