Iron sands explorer Indo Mines sacks Indonesian workers
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Soon-to-be-delisted Indo Mines plans to sack its Indonesian workers to lower its operating costs.
The move comes less than two months after its biggest investor, Rajawali Group, increased its ownership of Indo (ASX:IDO) to 76.49 per cent.
Rajawali launched a $4.6 million takeover for the company in November.
Indo told investors this morning the move to “restructure” the human resources division of its joint venture company PT Jogja Magasa Iron was flagged by Rajawali in its bidder’s statement released in November last year.
“In addition to removing a significant monthly overhead, the restructure also removes a growing redundancy liability from PT JMI’s balance sheet,” Indo said.
The company estimates the total redundancy bill will be around $US1.6 million ($2.1 million), which will be covered by Rajawali.
Indo says it will retain a “smaller team” to maintain its requirements under the contract of work struck with the Indonesian government in 2008.
The company, through PT Jogja Magasa Iron, owns a 70 per cent stake in the Jogjakarta iron project located about 30km from the major city of Jogjakarta, Indonesia.
Indo told shareholders in May it will be delisted from the ASX on August 21 due to low liquidity and the fact a “large proportion” of shareholders have unmarketable parcels of shares.
An unmarketable parcel is a shareholding worth less than $500 which, for a holder, may be difficult or expensive to sell.