Big debtors agree to repay debts at local banks<\/p>\n
JAKARTA (JP): Some 173 large debtors, including companies
\nowned by the family of former president Soeharto and his
\nassociate Mohamad Bob Hasan, have finally agreed to sign a letter
\nof commitment to repay bad debts at local banks.<\/p>\n
The letter of commitment stipulates the debtors will fully
\ncooperate with the Indonesian Bank Restructuring Agency (IBRA),
\nand be transparent about their financial and business conditions
\nto allow the agency to sort out a debt restructuring measure.<\/p>\n
IBRA public relations officer Franklin Richard said that 173
\nout of the country's 200 largest debtors had signed a letter of
\ncommitment by the Tuesday deadline.<\/p>\n
He told The Jakarta Post indebted companies which signed the
\nagreement included controversial carmaker PT Timor Putra Nasional
\nand petrochemicalmaker PT Chandra Asri Petrochemical Center,
\nrespectively owned by Soeharto's sons Tommy Hutomo Mandala Putra,
\nand Bambang Trihatmodjo.<\/p>\n
The indebted companies are just two of the 200 largest
\ndebtors, owing over Rp 70 trillion in nonperforming loans (NPLs).<\/p>\n
Earlier in the month, the indebted company owners and top
\nexecutives were summoned by Minister of Finance Bambang Subianto
\nand encouraged to be more cooperative with IBRA. The minister
\nurged them to seek new ways to recover the loans, and reminded
\nthem that litigation measures would be taken by the end of August
\nagainst debtors which failed to reach restructuring agreements.<\/p>\n
Bambang also threatened to publicly disclose owners of the
\nindebted companies by the end of this month if they declined to
\nbe cooperative.<\/p>\n
IBRA announced early this month the names of the 200 largest
\nindebted companies.<\/p>\n
The move was made after ministerial impatience over the slow
\nprocess of the loan restructuring, particularly as the debtors,
\nmostly owned by well-connected businessmen, have tended to be
\nuncompromising.<\/p>\n
International Monetary Fund Asia Pacific director Hubert Neiss
\nsaid on Tuesday recovery of the NPLs, either through
\nrestructuring or the sale of bank assets, would help reduce the
\ncountry's costly bank restructuring program, currently estimated
\nat 40 percent of gross domestic product.<\/p>\n
\"This is technically, as well as politically, a difficult
\nprocess, but absolutely essential to ensure that the budgetary
\n(bank recapitalization) costs are manageable.<\/p>\n
\"It is also essential for reasons of fairness not to put the
\nwhole financial burden of bank restructuring on the people. And,
\nloan collection and asset disposal will be a major element in
\ndealing with corruption. Most debtors who received bank loans on
\na noncommercial basis were well connected,\" he said.<\/p>\n
IBRA has so far collected over Rp 172 trillion in NPLs from 10
\nliquidated banks, four nationalized banks, seven state banks and
\nseven private banks which have signed on for the government-
\nsponsored recapitalization program.<\/p>\n
The agency is expected to control over Rp 230 trillion in
\nnonperforming bank assets once the NPLs of two other major
\nprivate banks and 38 banks closed down in March have been
\ntransferred.<\/p>\n
IBRA deputy chairman Eko S. Budianto recently estimated that
\nonly 60 percent of the indebted companies were eligible for
\nrestructuring, while the remaining 40 percent would have to face
\nliquidation, particularly because of their poor business
\nprospects or debt burden levels.<\/p>\n
He said properties, excluding hotels and multifinance
\ncompanies, had minimal restructuring prospects.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/big-debtors-agree-to-repay-debts-at-local-banks-1447893297",
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