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Indonesia's Sinar Mas may sell Indian unit

Indonesia's second largest conglomerate Sinar Mas group is looking to sell stake in its fully owned India unit, Sinar Mas Pulp & Paper (India) Ltd, a financial daily said on Tuesday.

The Business Standard, quoting unnamed sources, said the company was talking to both Indian and international firms to sell partial or full stake in the company.

"Sinar Mas is in talks with the Lalit Mohan Thapar group and at least two other international players," it said.

The Thapar group own India's largest private-sector paper making firm Ballarpur Industries.

The report said the financial troubles facing the Sinar Mas group could have prompted the Indonesian firm to divest stake in the Indian operations.

The group's flagship New York-listed Asia Pulp and Paper, which is the holding company for regional forestry product operations, is under financial stress with over $11 billion debt burden.

Last week the Business Standard reported that the Indian unit of Sinar Mas posted a small profit of Rs 40 million in calendar 2000, compared to Rs 720 million loss in the previous year.

But the company's accumulated losses stood at a whopping Rs 2.9 billion, the report said.

Sinar Mas India's paper making unit at Bhigwan, near Pune, has an annual capacity of 0.12 million tonnes and was set up with an investment of Rs 8 billion.

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