Bakrie to complete debt restructuring in September<\/p>\n
JAKARTA (JP): The widely diversified PT Bakrie & Brothers is
\nset to complete the restructuring of its US$1.02 billion debt in
\nSeptember this year, the business group's top executive said here
\non Thursday.<\/p>\n
Company president Irwan Sjarkawi said auditors were now in the
\nfinal stages of the due diligence on the proposed debt-to-equity
\nswap.<\/p>\n
\"The auditors are still working hard on the due diligence. We
\nare expecting it to be finalized in the next three to four
\nweeks,\" he said following the business group's shareholders
\nmeeting.<\/p>\n
The company earlier announced it had reached an agreement in
\nprinciple with its creditors to restructure its debt through a
\ndebt-to-equity swap.<\/p>\n
The restructuring involves the establishment of a Master
\nSpecial Purpose Vehicle company, through which creditors will
\ntake over 80 percent of Bakrie & Brothers' shares in five of its
\nsubsidiaries.<\/p>\n
In addition, this new company will own 30 percent of Bakrie &
\nBrothers through the issuance of new shares on a fully diluted
\nbasis.<\/p>\n
The main aim of the debt restructuring is to ensure the
\ncompany's assets are not sold in the current depressed market,
\nSjarkawi said.<\/p>\n
He said eight of Bakrie's subsidiaries, including PT Bakrie
\nPipe Industries, PT Southeast Asia Pipe Industries, PT Seamless
\nPipe Indonesia Jaya, publicly listed PT Bakrie Sumatera
\nPlantations, PT Bakrie Tosanjaya, PT Bakrie Building Industries
\nand PT Bakrie Corrugated Metal Industries, were currently
\nundergoing debt restructuring.<\/p>\n
He said both Bakrie and its subsidiaries' debts, amounting to
\naround $570 billion and $500 billion, respectively, should
\nimmediately be restructured to enable the company to continue its
\noperations and enhance its future performance with a sustainable
\nlevel of debt.<\/p>\n
\"Bakrie & Brothers' debt will be zero after the finalization
\nof the debt restructuring, meaning that the company will then be
\nready to begin in a much better condition,\" he said.<\/p>\n
He said the company was upbeat its debt restructuring program
\nwould proceed smoothly.<\/p>\n
Sjarkawi said Bakrie ended 1998 with a consolidated net loss
\nof Rp 2.18 trillion, compared to a net loss of Rp 283.9 billion
\nin 1997.<\/p>\n
\"The 1998 deficit was due mainly to a substantial increase in
\nforeign currency losses along with a consequent rise in net
\ninterest costs,\" he said.<\/p>\n
He said losses resulting from the weaker rupiah jumped to Rp
\n2.08 trillion in 1998 from Rp 53.1 billion in 1997, while net
\ninterest expenses surged to Rp 849.9 billion last year from Rp
\n105.4 billion in 1997.<\/p>\n
The shareholders approved during the meeting the group's
\nproposal not to pay dividends for the 1998 financial year due to
\nthe company's losses.<\/p>\n
However, Bakrie reported the company's consolidated revenue
\nincreased by 79 percent in 1998 to Rp 3.52 trillion from Rp 1.96
\ntrillion in 1997.<\/p>\n
Of the total revenue, the company's agribusiness contributed
\n60.2 percent (Rp 2.13 trillion), followed by infrastructure
\nsupport with 27.4 percent (Rp 971.9 billion) and
\ntelecommunications with 12.4 percent (Rp 439.4 billion).<\/p>\n
Agribusiness experienced the highest increase in revenue,
\nrising around 159 percent from the Rp 825 billion booked in 1997.<\/p>\n
The increase was the result of improved sales volume by the
\nLewis & Peat group of trading companies and by Bakrie's oil palm
\nsubsidiaries.<\/p>\n
The company's telecommunications business saw its revenue
\ndecline by 5 percent last year from Rp 462.4 billion in 1997.<\/p>\n
The drop was mainly caused by a decrease in sales of its fixed
\nwireless business under PT Radio Telepon Indonesia (Ratelindo),
\nwhose revenue fell to Rp 81.5 billion last year from Rp 104.1
\nbillion in 1997. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bakrie-to-complete-debt-restructuring-in-september-1447893297",
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