APP China Group Ltd plans to sell shares as early as next year, according to a member of the Widjaja family, which owns more than a fifth of the Shanghai-based company as well as a controlling stake in its former parent, Asia Pulp & Paper Co.

　　APP China will seek a Shanghai listing once the restructuring of its former parent's Indonesian businesses is completed, said Indra Widjaja, a member of the Indonesian-Chinese family which owns Asia Pulp and other companies in the Sinar Mas Group.

　　The share sale plan comes three months after Asia Pulp, which owes about US$14 billion of debt, divested itself of its Chinese unit in a debt-for-equity swap that was opposed by some of the unit's creditors.

　　At the time, APP China said it had no plans to seek a listing on any stock exchange, so finding buyers for APP China's shares could prove tough.

　　"I would raise my eyebrows," said Hugh Young, managing director of Aberdeen Asset Management Asia Ltd in Singapore.

　　"They still owe investors billions of dollars."

　　APP China's share sale would enable it to raise new funding for expansion. The group ordered about US$500 million of pulp machinery for a plant on China's Hainan island, plans a US$540 million expansion to produce packaging products in the eastern city of Ningbo, and invested US$114 million in five forestry ventures, according to a document on the share swap that was sent to creditors in September.

　　APP China, which owed Chinese banks about US$2.7 billion at the time of its default, has approached Chinese banks, including Bank of China, to finance its expansion. It is still negotiating with those banks, according to Widjaja.

　　When Asia Pulp defaulted on its debt in March 2001, it considered selling some operations, including businesses in China, in order to raise funds. JP Morgan Chase & Co, in a research report published at the time, said Asia Pulp's China operations could be valued at around US$2.6 billion.

　　The Widjaja family may face challenges in attracting investors to their Chinese unit given that Asia Pulp's 2001 default - which led to its delisting from the New York Stock Exchange - still hasn't been resolved.

　　(Bloomberg News)