Arpeni Unit Terminates Derivative Contracts with JP Morgan

A wholly owned subsidiary of PT Arpeni Pratama Ocean Line Tbk (APOL), Arpeni Marine Co Pte Ltd, terminated derivative contracts with JP Morgan worth Rp517.02 billion on December 16 2009.
In return, Arpeni Marine paid Rp304.96 billion to JP Morgan for derivative contracts early termination, depleting its cash and cash equivalent and devastating its holding bottom line.
Arpeni Marine signed four different contracts with JP Morgan. Under structured protection agreement worth Rp120,09 billion, signed on May 16 2007, the contract would mature on May 3 2013. Mint swap transaction valued US$20 million or Rp184.56 billion signed on January 30 2007 and due on May 3 2013, while swaption transaction and foreign exchange tarn worth US$10 million or Rp92.28 billion and Rp120.09 billion consecutively should be ended on May 13 and May 1 2013.  Cash and cash equivalent of Arpeni Ocean Line at the end of September 2009 plunged 85.23% to Rp119.01 billion from period of January-September 2008 of Rp806.07 billion.
Adding to that, APOL in September last year was suffering a profit drop of 7,045.79% as well. The company was in red by posting net loss of Rp561.22 billion at the end of third quarter last year from Rp8.08 billion of net profit a year before. Earning per share tumbled from Rp3 to -Rp187. Loss on derivative of Rp420.78 billion was the culprit.
Operating profit dropped 65.99% from Rp404.45 billion in September 2008 to Rp137.52 billion last year as well as a shrinking revenue of 30.27% from Rp1.85 trillion to Rp1.29 trillion.
During cash shortage, Arpeni Ocean Line secured some bank loans. In October, it secured three different bank loans from PT Bank Multiarta Sentosa worth Rp18 billion, BCA of Rp50 billion, revolving facility extension of US$15 million from Tokyo-Mitsubishi UFJ, and Rp100 billion from PT Bank Mizuho Indonesia.