Astra proposes debt restructuring<\/p>\n
JAKARTA (JP): The country's largest automaker, PT Astra
\nInternational, said on Friday that it had proposed a two-step
\nprogram to its foreign creditors to restructure its US$2 billion
\nof overseas debt.<\/p>\n
The company said in a statement that the first step involved a
\ndebt repurchase program.<\/p>\n
Astra president director Rini M. Soewandi said the company
\nwould seek to buy back $70 million in debt \"through a Dutch
\nauction\".<\/p>\n
In a Dutch auction the creditors bid to sell their debt in a
\nsystem where the bidding gets lower and lower rather than higher
\nand higher. However the company can cap the amount.<\/p>\n
She said the $70 million was generated from the recent sale of
\nAstra's micro-chip manufacturing unit.<\/p>\n
\"This is an offering to the creditors that have a short-term
\nview, and would prefer to get out,\" Rini said, as quoted by Dow
\nJones Newswires.<\/p>\n
Rini said that creditors which choose not to join the buy-back
\noption, or fall outside the $70 million cap, would join the
\nsecond part of Astra's debt plan.<\/p>\n
The second part would split the remaining loan amounts into
\nthree separate tranches at a predetermined ratio.<\/p>\n
The first tranche would be 14 percent of the original loan and
\nwould be with a three-year term, with quarterly interest payments
\nand principal payments every six months. The first repayments
\nwould start two years after the signing of a restructuring
\nprogram.<\/p>\n
The largest part of the original outstanding debt, or 78
\npercent, would be extended to a six-year term, with a grace
\nperiod of one year on interest payments and three years on
\npayment of principal.<\/p>\n
\"And 8 percent of the loan would be converted into zero coupon
\nbonds, with detachable warrants for eight years and a sinking
\nfund,\" Rini said.<\/p>\n
Astra told its creditors at a meeting in Singapore last month
\nthat it had stopped paying interest on about US$1.4 billion in
\ngroup loans.<\/p>\n
Multifinance firm PT BBL Dharmala Finance said on Friday that
\nit had signed a standstill agreement with its foreign lenders to
\nallow the firm to negotiate its debt payments.<\/p>\n
\"During the standstill period, BDF and its creditors will
\ncontinue negotiations to restructure the company finances and to
\nresume its normal operations,\" company president Sanjiv Chatrath
\nsaid in a statement.<\/p>\n
The company's foreign creditors include the Asian Development
\nBank (ADB), Commonwealth Development Corporation (CDC) of the UK,
\nGermany's Investment and Development Company (DEG) and Krung Thai
\nBank Public Co., Ltd. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/astra-proposes-debt-restructuring-1447893297",
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