Jakarta. Modern Internasional, former master franchiser of the recently closed down 7-Eleven stores in Indonesia, plans to sell its assets to save the company from further financial trouble and pay back its debts, a commissioner at the company said on Friday (14/07).
Donny Sutanto said the company will sell assets including land, building and equipment from its 7-Eleven and Fuji Film stores to prospective investors.
The company began life in 1971 as an authorized distributor of Japan's Fuji Photo Film in Jakarta. Facing an onslaught from digital photography, the company transformed its Fuji Photo outlets into 7-Eleven convenience stores in 2009.
Eight years later, having for a while lorded it over other convenience stores in the capital thanks to its cheap beers and generous seating area, the company closed all of its outlets at the end of June, saying it could no longer afford to keep the stores open.
Around 1,200 to 1,300 employees had to be laid off because of 7-Eleven's closure, Donny said.
"The fresh funds from selling our assets will be used to pay back bank loans, provide severance pay for our employees and pay outstanding rent on our stores," he added.
Modern Internasional's total assets stood at Rp 1.56 trillion ($117 million) as of March this year, 21 percent lower than Rp 1.98 trillion recorded at the end of 2016.
In a last-ditch of effort to save the business, the company attempted to sell 7-Eleven to Charoen Pokphand Indonesia, the local arm of Thai conglomerate Charoen Pokphand, but the deal fell through last month.
"Before Charoen, we had two potential buyers, but we also failed to reach an agreement with them," Donny said.
He said among the many reasons why the prospective buyers had backed out was because Texas-based principal 7-Eleven Inc. was only prepared to give any new franchiser in Indonesia a year to improve the ailing business.
Donny indicated the target was unrealistic.
The company bought the 7-Eleven franchise in 2009 for $1.5 million, which granted it control for 20 years since its first outlet was opened.
During its peak in 2014, the company earned Rp 1.43 trillion in net sales, making a lot of its profit from sales of alcohol beverages that also helped selling more snacks at the stores.
A year later its revenue declined to Rp 1.22 trillion after the government banned sales of alcohol beverages in smaller retailers. Last year, the company booked only Rp 891.42 billion in revenue.
After closing down the 7-Eleven stores, Donny said the company will focus on developing medical equipment and document solution businesses.
Modern Internasional distributes medical equipment from Japanese brands Shimadzu and Sirona to hospital chains, clinics and community health centers.
The company's shares, trading under the MDRN stock ticker, closed on Friday at Rp 50 a piece, unchanged since June 14.