Government approves debt restructuring for Chandra Asri<\/p>\n
JAKARTA (JP): The government said on Friday that it had
\napproved a debt restructuring deal for the petrochemical giant PT
\nChandra Asri under which businessman Prajogo Pangestu would get a
\n49 percent stake, the government 31 percent and Japan's Marubeni
\nCorp., 20 percent in the company.<\/p>\n
A meeting of the Financial Sector Policy Committee (FSPC)
\ndecided on Wednesday that Prajogo through his company PT Inter
\nPetrindo Inti Citra (IPIC) would take over $638.6 million of
\nChandra Asri's foreign debts and Rp 120 billion of its local
\ndebts.<\/p>\n
The government would hold its 31 percent stake through the
\nIndonesian Bank Restructuring Agency (IBRA), FSPC said in a press
\nrelease.<\/p>\n
The FSPC, comprising senior economic ministers, is in charge
\nof approving IBRA's major corporate and bank restructuring deals.<\/p>\n
Chandra Asri owes $700 million to Japanese creditors and some
\nRp 3 trillion to domestic banks that are under IBRA's
\nsupervision.<\/p>\n
Under pressure from the Japanese creditors, the government
\ninitially agreed to take an 80 percent stake in the company with
\nMarubeni, as the leader of the Japanese creditor consortium,
\nholding the remaining 20 percent.<\/p>\n
However, when the public decried the agreement as a bailout
\nscheme for the conglomerate, the government changed its mind.<\/p>\n
Analysts have said that by taking 80 percent of Chandra Asri,
\nthe government could leave itself liable for any future debts of
\nthe company.<\/p>\n
\"All $800 million worth of shares of PT Chandra Asri owned by
\nthe Indonesian founding shareholders will be transferred to IPIC
\nunder Prajogo's ownership,\" FSPC added.<\/p>\n
According to FSPC, Prajogo's 49 percent stake in Chandra Asri
\nis worth $800 million, for which he will issue convertible bonds
\nin the same amount to IBRA.<\/p>\n
The bonds are convertible to IPIC shares and carry an annual
\ninterest rate of six percent for a period of 12 years.<\/p>\n
IPIC will guarantee the bonds with its shares in Chandra Asri
\nas well as PT Tripolyta, and its assets in the form of shares and
\nlands of Panca Puri.<\/p>\n
Prajogo must also submit additional assets as collateral,
\nincluding his shares in PT Tanjung Enim Lestari, PT Barito
\nPacific Timber and in other companies.<\/p>\n
FSPC has required Prajogo to submit the assets and shares
\nwithin one week after the debt restructuring agreement is made.<\/p>\n
The committee has also required Prajogo to surrender personal
\nproperty as additional collateral.<\/p>\n
\"If according to an evaluation by an independent appraiser,
\nPrajogo's guarantee for the bonds other than IPIC's stake in
\nChandra Asri, does not cover the nominal value of the bonds,
\nPrajogo will be obliged to cover the shortfall,\" FSPC said.<\/p>\n
Under the deal, the government and Prajogo will ask Marubeni
\nto lower its debt rates from the current rate of 2.5 percentage
\npoints above the London Interbank Offer Rate (Libor) to a level
\nsimilar to the Libor rate, while extending the repayment period
\nfrom the present 12 years to 15 years.<\/p>\n
The government will also ask Marubeni to raise its ownership
\nin Chandra Asri from its current debt-to-equity deal worth $100
\nmillion.<\/p>\n
\"The shareholders of Chandra Asri (IBRA, Prajogo, and
\nMarubeni) are given a maximum of three months to finalize the
\nnegotiation process, which IBRA will then report to the FSPC,\"
\nthe committee said.<\/p>\n
The government also asked Marubeni to help Chandra Asri find
\nworking capital, extend its production capacity and allow
\nChandra Asri to find buyers and suppliers other than Marubeni to
\nreduce its dependence on the Japanese company.<\/p>\n
Because of the sensitive issue of the exact ownership of
\nChandra Asri, the government has delayed the debt restructuring
\ndeal several times.<\/p>\n
The country hopes that a restructuring of its corporate sector
\nwill create enough investor confidence to enable domestic banks
\nto resume lending to the real sector. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-approves-debt-restructuring-for-chandra-asri-1447893297",
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