Creditors approve Danareksa debt restructuring<\/p>\n
JAKARTA (JP): State-owned investment company PT Danareksa won
\napproval from its 60 creditors on Thursday to restructure its
\nUS$196 million in foreign debt.<\/p>\n
Danareksa executive Edgar Ekaputra said under the debt
\nrestructuring agreement, the maturity period of $148.5 million of
\nthe total debt, mostly in short-term promissory notes, was
\nextended to eight years, while the maturity period for the
\nremaining debt was extended to three years.<\/p>\n
Previously, he said, the company repurchased a total of $136
\nmillion in promissory notes at an average discount of 49.5
\npercent.<\/p>\n
Holders of the promissory notes were given the opportunity to
\nchoose one of three alternatives, namely, debt buyback, three-
\nyear medium-term debt conversion and eight-year long-term debt
\nconversion. The debt restructuring reduced Danakreksa's debt load
\nto $196 million from about $366 million previously.<\/p>\n
Some 76 percent of the promissory note holders agreed to join
\nthe eight-year debt conversion program, reflecting creditors'
\nconfidence in Danareksa's management, Edgar said.<\/p>\n
The three-year transferable loans will bear an average
\ninterest rate of 0.75 percent above the London Inter Bank Offered
\nRate (LIBOR), while the eight-year loans will carry an interest
\nrates of 2 percent above the LIBOR for the first three years and
\nup to 6 percent above the LIBOR for the last five years, he said.<\/p>\n
Edgar said the restructuring did not involve local creditors,
\nwho are owed a total of Rp 563 billion and $45 million.<\/p>\n
\"To make it fair between foreign and local creditors after the
\nrestructuring, we have a pro rata payment covenant in the
\nrestructuring deal,\" he said.<\/p>\n
The covenant requires a pro rata payment to foreign creditors
\nwith a ratio of $1 to Rp 2,900, meaning that for every one dollar
\npaid to foreign creditors, Danareksa has to pay Rp 2,900 to local
\ncreditors.<\/p>\n
Jusuf Anwar, the chairman of the private Jakarta Initiative
\ndebt task force, said Danareksa's debt restructuring would help
\nstretch out debts, reducing the short-term pressure on
\nIndonesia's balance of payment.<\/p>\n
\"Danareksa is the 17th success story of the companies who
\njoined our agency for debt restructuring,\" he said without
\ndisclosing the names of the other 16 companies, at their request.<\/p>\n
Danareksa, established in 1976, signed the debt restructuring
\ndeal with about 60 creditors, represented by a steering committee
\nwhich included Credit Suisse, First Boston, Daiwa Securities of
\nJapan and Kookmin Bank of South Korea.<\/p>\n
Philip Lynch of Lehman Brothers, Danareksa's financial
\nadviser, said the deal was agreed to in principle in a record
\ntime of less than 11 months.<\/p>\n
He also said the restructuring did not involve any capital
\ninjection or additional support from shareholders. (02)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/creditors-approve-danareksa-debt-restructuring-1447893297",
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