Publicly listed company PT Modern Internasional - the operator of convenience store chain 7 Eleven - is picking itself up after the recent collapse of its retail business and has promised to settle all its obligations to former employees and creditors.
The company is looking to sell some of its assets in the form of land and buildings to raise funds to provide partial severance pay to 1,200 to 1,300 of its former employees who were laid off following the closure of all its 7 eleven outlets.
"We have unproductive assets from (previois imaging service business) FujiFilm that we can sell. We bought these assets 20 to 30 years ago. At that time, the book value was low and now the market value is high," Modern Internasional director Chandra Wijaya said during a press conference on Friday.
He reiterated that the company was committed to fulfilling its former employees's rights in accordance with the Labor Law.
It is currently calculating the total amount of funds it can receive from the sale of its assets, as well as the total severance pay it owes its former employees.
Data from the first quarter financial report shows that Modern Internasional had Rp 1.38 trillion (US$103.39 million) in total liabilities.
Going forward, it plans to focus on its existing medical imaging business as it still holds two medical imaging brands, namely Shimadzu and Sirona dental imaging.
It will also develop PT Modern Data Solusi, its subsidiary that concentrates on providing print services and IT solutions under the brand RICOH.
The company is optimistic that these existing lines of business have bright prospects and will spur growth in the future, replacing business from 7 Eleven that has been a moneymaker for several years.
Medical imaging contributed 21.6 percent of the company's total revenue in the first quarter, while IT solutions accounted for 12.7 percent.
Compared to the same period last year, both segments experienced an increase in revenue by 46 percent and 6.4 percent, respectively.
"We admit that all this time, we have not put our focus on these segments (medical imaging and IT solutions), so the businesses didn't thrive. However, with our decision to close 7 Eleven, we can now concentrate on developing these businesses," Modern Internasional commissioner Donny Susanto said.
The company is looking to sell medical imaging equipment to either private or goverment owned hospitals and clinics. At present, it has supplied products to Mitra Kemayoran, Siloam Hospitals and Prodia laboratories.
The management claimed the decision to shut down all 7 Eleven stores was the best option considering the mounting losses it had suffered over the years and attributed the closure to both internal and external factors.
"The expansion of 7 Eleven was too fast in teh beginning, when most of the expansion was funded using bank loans," Chandra said, adding that the company ended up focusing on loan repayments instead of raising working capital.
Weakening purchasing power, stiffer competition and an alcohol sales ban at minimarkets, which began in April 2015, drastically impacted its performances as well.
At one point, the company looked to other parties to develop a strategic partnership to maintain its retail business.
Modern Internasional said the "very burdensome requirements" from its master franchisor Seven Eleven Inc. from the United States had caused potential investors to retreat.
In April, Pt Charoen Pokphan Indonesia, an affiliate of Thai conglomerate Charoen Pokphan Group, showed interest in acquiring the 7 Eleven business for Rp 1 trillion, but later withdrew from the deal.
The company is looking to sell some of its assets in the form of land and buildings to raise funds to provide partial severance pay to 1,200 to 1,300 of its former employees who were laid off following the closure of all its 7 eleven outlets.
"We have unproductive assets from (previois imaging service business) FujiFilm that we can sell. We bought these assets 20 to 30 years ago. At that time, the book value was low and now the market value is high," Modern Internasional director Chandra Wijaya said during a press conference on Friday.
He reiterated that the company was committed to fulfilling its former employees's rights in accordance with the Labor Law.
It is currently calculating the total amount of funds it can receive from the sale of its assets, as well as the total severance pay it owes its former employees.
Data from the first quarter financial report shows that Modern Internasional had Rp 1.38 trillion (US$103.39 million) in total liabilities.
Going forward, it plans to focus on its existing medical imaging business as it still holds two medical imaging brands, namely Shimadzu and Sirona dental imaging.
It will also develop PT Modern Data Solusi, its subsidiary that concentrates on providing print services and IT solutions under the brand RICOH.
The company is optimistic that these existing lines of business have bright prospects and will spur growth in the future, replacing business from 7 Eleven that has been a moneymaker for several years.
Medical imaging contributed 21.6 percent of the company's total revenue in the first quarter, while IT solutions accounted for 12.7 percent.
Compared to the same period last year, both segments experienced an increase in revenue by 46 percent and 6.4 percent, respectively.
"We admit that all this time, we have not put our focus on these segments (medical imaging and IT solutions), so the businesses didn't thrive. However, with our decision to close 7 Eleven, we can now concentrate on developing these businesses," Modern Internasional commissioner Donny Susanto said.
The company is looking to sell medical imaging equipment to either private or goverment owned hospitals and clinics. At present, it has supplied products to Mitra Kemayoran, Siloam Hospitals and Prodia laboratories.
The management claimed the decision to shut down all 7 Eleven stores was the best option considering the mounting losses it had suffered over the years and attributed the closure to both internal and external factors.
"The expansion of 7 Eleven was too fast in teh beginning, when most of the expansion was funded using bank loans," Chandra said, adding that the company ended up focusing on loan repayments instead of raising working capital.
Weakening purchasing power, stiffer competition and an alcohol sales ban at minimarkets, which began in April 2015, drastically impacted its performances as well.
At one point, the company looked to other parties to develop a strategic partnership to maintain its retail business.
Modern Internasional said the "very burdensome requirements" from its master franchisor Seven Eleven Inc. from the United States had caused potential investors to retreat.
In April, Pt Charoen Pokphan Indonesia, an affiliate of Thai conglomerate Charoen Pokphan Group, showed interest in acquiring the 7 Eleven business for Rp 1 trillion, but later withdrew from the deal.
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