Showa Denko ends partnership with Antam in ICA
Tuesday, July 25 2017 - 02:42 AM WIB
Japan?s Showa Denko KK (SDK) has decided to cease its partnership with IDX-listed mining company PT Aneka Tambang Tbk (Antam) in PT Indonesia Chemical Alumina (ICA), which operates the Tayan chemical grade alumina (CGA) plant in West Kalimantan.
Antam, which owns 80 percent of ICA, said in a statement Tuesday that SDK made the decision after the two companies failed to reach agreement on how to turn around the Tayan CGA plant, which has yet to deliver profitability and that production has been below desired level amid ?challenges.? SDK owns 20 percent of the Tayan CGA plant, which started operation in 2015.
?In line with the challenges, Antam and SDK have been in discussion toward restructuring the joint venture arrangement. Regrettably, both parties were unable to achieve favorable agreements and SDK has elected to cease its partnership with Antam in PT ICA,? Antam said in the statement.
Antam said that SDK has conveyed its interest in offering its shares in PT ICA to Antam and/or a third party. ?In addition, SDK has also offered to pursue the possibility for a possible joint sale of all of PT ICA?s shares together with Antam to third party.?
Following SDK?s decision, Antam said it will begin a thorough financial, legal and commercial evaluation. Antam said it will issue a release on the impact of its investment in PT ICA, including impact on the company?s financial statements and obligations once the evaluation has been completed.
?The investment in PT ICA will not be made if an analysis shows the investment will not generate economic value for Antam and the respective shareholders,? Antam said.
The Tayan CGA plant has installed production capacity of 300,000 tons.
Editing by Reiner Simanjuntak