APP to contest bid to seize pulp mills<\/p>\n
Agence France-Presse, Jakarta<\/p>\n
Debt-ridden Asia Pulp and Paper said on Thursday it would
\nfight a legal action launched in Indonesia by two U.S. companies
\nwho reject a restructuring deal signed with other creditors.<\/p>\n
The Singapore-based wood and pulp conglomerate defaulted in
\n2001 on debts totaling US$13.9 billion, the biggest corporate
\ndefault in the history of emerging markets.<\/p>\n
It is facing several lawsuits from creditors who reject an
\ninitial restructuring deal.<\/p>\n
U.S. fund managers Gramercy Advisors and Oaktree Capital
\nManagement last month applied to a district court in Riau
\nprovince on Sumatra island to foreclose on the paper-making
\nplants of APP's listed Indonesian subsidiary, Indah Kiat Pulp and
\nPaper.<\/p>\n
The plants were collateral for a debt of some $486 million.<\/p>\n
\"We will vigorously defend this litigation, as we have in the
\npast defended all legal actions which are inconsistent with the
\nconsensual restructuring,\" said Teguh Ganda Wijaya, APP's chief
\nexecutive officer, in a statement.<\/p>\n
He said the so-called Master Restructuring Agreement is the
\nonly way to protect the interests of all.<\/p>\n
On October 30, APP signed a deal with several key creditors to
\nrestructure $6.4 billion of its debt -- the portion owed by its
\nfour Indonesian units. The agreement still needs the support of
\n90 percent of creditors to become final.<\/p>\n
The firm is controlled by members of Indonesia's Widjaya
\nfamily.<\/p>\n
Gramercy and Oaktree are among creditors who hold 60 percent
\nof the debt of APP's Indonesian units and who have yet to sign
\nthe deal.<\/p>\n
The U.S. firms say they hold a combined $75 million in bond
\nprincipal issued by Indah Kiat. They have rejected the
\nrestructuring deal because it does not give preferential
\ntreatment to secured creditors.<\/p>\n
The district court at Bengkalis has set Thursday as the
\ndeadline for Indah Kiat to appear before it to settle its
\nobligations. Failure to respond could lead to an application for
\nseizure of the two pulp mills.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/app-to-contest-bid-to-seize-pulp-mills-1447893297",
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"sponsor": "Okusi Associates",
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