Riady scion steps in to put Lippo property arm on path to recovery.
JAKARTA (BLOOMBERG) - Late last year, when Indonesia's biggest property developer was sinking under debt, it was crunch time for the Lippo Group's Riady family.
At a meeting to discuss rescue options, tycoon Mochtar Riady, 90, the founder of the group, turned to his young grandson for help. Reluctant at first, John Riady - a Wharton School graduate - said he eventually agreed to run the troubled flagship PT Lippo Karawaci. His salvage plan included a US$788 million (S$1.09 billion) rights issue in July, sale of assets and a debt recast.
The measures have helped ease a cash squeeze and put the money-losing, listed property unit on a path to recovery. The revamp will start returning positive cash flow starting next year, while the company will continue to dispose of non-core assets to pare debt, the junior Mr Riady said in an interview. In a show of confidence, shares of the developer have surged 37 per cent since he became the chief executive officer in March, while its dollar bonds have also rallied.
Adapted from The Straits Times 13th September 2019