FSPC approves major corporate debt restructuring<\/p>\n
JAKARTA (JP): The powerful ministerial Financial Sector Policy
\nCommittee (FSPC) said on Thursday that it had approved corporate
\ndebt restructuring deals worth some Rp 189.7 trillion (US$18.9
\nbillion) between 2000 and the end of March.<\/p>\n
The FSPC said in a press release that the total value of the
\ndebt workouts approved by the committee during the first three
\nmonths of this year alone was almost three times as large as
\nthose concluded throughout last year.<\/p>\n
\"During the first three months of 2001 alone, the total value
\nof debt restructuring deals approved by the FSPC was Rp 141.04
\ntrillion, or almost three times as large as those concluded
\nthrough all of last year,\" said Coordinating Minister for the
\nEconomy Rizal Ramli.<\/p>\n
Rizal chairs the FSPC which groups several senior economic
\nministers, including the ministers of finance, and industry and
\ntrade.<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA) is authorized
\nto decide on debt restructuring and asset sale deals worth only
\nless than Rp 1 trillion. Transactions worth Rp 1 trillion and
\nmore must get prior approval from the FSPC.<\/p>\n
The press release said that the corporate debt restructuring
\ndeals approved by the FSPC were those processed by IBRA, the
\nJakarta Initiative Task Force (JITF) and the state-owned Bank
\nMandiri.<\/p>\n
IBRA itself controls more than Rp 260 trillion worth of bank
\nnon-performing loans (NPLs) it took over from nationalized and
\nclosed banks.<\/p>\n
The JITF is a government-sponsored agency set up to provide a
\nmediation process between debtors and creditors focusing
\nparticularly on the restructuring of private sector overseas
\ndebt. But debtors and creditors cannot be forced to join the JITF
\nmediation process because it is based on a voluntary approach.<\/p>\n
Last year, the JITF managed to restructure around US$9 billion
\nin corporate debts.<\/p>\n
The press release did not mention the reason why Bank Mandiri
\nhad sought the approval of the FSPC in the restructuring of its
\ndebtors, particularly as most of the bank's huge NPLs had been
\ntransferred to IBRA.<\/p>\n
The FSPC did not specify which of the approved restructuring
\ndeals had finally been closed and which were based on provisional
\nMOUs (Memorandum of Understanding).<\/p>\n
Rizal has repeatedly asserted that the FSPC is strongly
\ncommitted to accelerating the restructuring of the country's
\nmassive corporate debt in a bid to help restore the ailing
\neconomy.<\/p>\n
The government has been criticized for the slow progress in
\nthe corporate debt restructuring area.<\/p>\n
The criticism has also been directed at the FSPC as some of
\nthe deals were seen as more benefiting the debtors, particularly
\nbig conglomerates, than the state.<\/p>\n
Among of the critics were the International Monetary Fund and
\nthe World Bank.<\/p>\n
An IMF mission led by deputy director for Asia Pacific Anoop
\nSingh arrived in Jakarta earlier this week to start a review of
\nthe country's key economic reform program with the government.
\nThe review will include the corporate debt restructuring issue.<\/p>\n
The mission will complete the review in about two weeks and
\nwill report to Washington before the IMF decides on the
\ndisbursement of its next crucial $400 million loan tranche to the
\ncountry.<\/p>\n
The IMF promised early last year to provide a total of $5
\nbillion in loans to the current administration to help finance a
\nthree-year economic reform program. So far around $1 billion has
\nbeen disbursed.<\/p>\n
The third loan-tranche disbursement was delayed late last year
\ndue to signs that the government was wavering in the
\nimplementation of key reform programs, including corporate debt
\nrestructuring.<\/p>\n
In a bid to appease the IMF, the FSPC recently issued a new
\ncorporate debt restructuring ruling, which includes allowing the
\noversight committee of IBRA to review all the restructuring deals
\nmade by IBRA. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/fspc-approves-major-corporate-debt-restructuring-1447893297",
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