Astra International to repurchase its debt<\/p>\n
JAKARTA (JP): The country's largest automaker PT Astra
\nInternational announced on Friday that it would buy back US$1.17
\nbillion in unsecured debt to its foreign creditors at 30 percent
\nof the face value.<\/p>\n
The company said in a statement that it had $45 million in
\nfunds for the buyback program.<\/p>\n
\"Astra's creditors have up to March 12 to participate in the
\nbuyback program,\" the statement, a copy of which was made
\navailable to The Jakarta Post said.<\/p>\n
Last month the company offered to spend up to $45 million to
\nbuy back the debt consisting of convertible bonds worth $125
\nmillion due 2006, $125 million due 2001, $200 million due 2003,
\nand Rp 400 billion due 2002 and \"any non-trade indebtedness of
\nAstra International to its creditors and documented under
\nbilateral or syndicated banking facilities, inter-company loan
\nagreements or by promissory notes.\"<\/p>\n
The company's public relations official Julian Warman said on
\nFriday that if the creditors' offers exceeded the $45 million
\nfunds Astra has set aside for the debt buyback program, they
\nwould be divided proportionately.<\/p>\n
\"All bids will be treated equally,\" he said pointing out that
\nthere was no preferential treatment provided for early bids.<\/p>\n
The Astra International Group, one of the best managed firms
\nin the country, said that it reserved the right to shorten or
\nextend the period of time during which indicative bids may be
\nsubmitted.<\/p>\n
\"The company has also the rights to amend the terms on which
\nindicative bids may be submitted and terminate or cancel the
\ninvitation,\" the statement said.<\/p>\n
Julian said that the program, which is voluntary, provides a
\nquick exit for creditors who want to make up losses and cut their
\nexposure in Indonesia.<\/p>\n
Astra International is currently saddled with a total $2
\nbillion in foreign-debt obligations and Rp 2 trillion in local-
\ncurrency debt.<\/p>\n
Astra International, helped by its financial advisors Chase
\nManhattan Asia Ltd., Sakura Merchant Bank Ltd., and Sumitomo Bank
\nLtd.. told its creditors in October last year that it would stop
\nservicing interest payments until it reached an agreement with
\ncreditors on restructuring its debt.<\/p>\n
But some of its creditors, especially the Japanese banks,
\nopposed the company's plan to write off some of the debt before
\nreaching an accord to restructure it.<\/p>\n
Negotiations with its foreign creditors stalled in December
\nlast year when the Sanwa Bank-led consortium and Tokai Bank
\nrefused to accept a suspension of interest payments.<\/p>\n
The two banks, which Astra owes $200 million and $10 million
\nrespectively, declared Astra in default and were demanding full
\nand immediate payment.<\/p>\n
Astra International is one of many indebted Indonesian firms
\nhaving difficulties in repaying debts following the rupiah's
\nsharp deprecation by as much as 80 percent against the American
\ndollar in the past year.<\/p>\n
The rupiah, which sank to its lowest level of 17,000 in
\nJanuary last year, hovered around 8,700 on Friday against its
\npre-crisis level of 2,450. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/astra-international-to-repurchase-its-debt-1447893297",
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