Govt approves PT Timor Putra debt restructuring<\/p>\n
JAKARTA (JP): The government has approved the debt
\nrestructuring of automaker PT Timor Putra Nasional (TPN),
\nallowing the company to continue its Timor national car project
\nin a joint venture with South Korean Kia Motors Corporation.<\/p>\n
The Cabinet's Financial Sector Policy Committee (FSPC) said in
\na statement on Monday that it decided to approve the debt
\nrestructuring agreement, which was signed by TPN and the
\nIndonesian Bank Restructuring Agency (IBRA) during its meeting on
\nFriday.<\/p>\n
TPN is wholly owned by former president Soeharto's youngest
\nson Hutomo \"Tommy\" Mandala Putra. Kia and the company formed a
\njoint venture, PT Kia Timor Motors (KTM) in 1997 to produce the
\nTimor cars in Cikampek, West Java.<\/p>\n
TPN owes local banks US$521.5 million and the debt has been
\ntaken over by the agency.<\/p>\n
Under the debt restructuring agreement, FSPC said, TPN would
\npay the agency $8.62 million in cash and transfer assets worth
\n$5.13 million and at least 69 percent of its shares in Kia Timor
\nMotors to the agency.<\/p>\n
However, FSPC did not specify the number of IBRA shares in KTM
\nafter the execution of the agreement.<\/p>\n
Tommy said during a ceremony to launch the joint venture in
\nFebruary 1997 that TPN had a 35 percent stake in KTM, with Kia
\nMotors holding 30 percent and the remaining 35 percent shares
\nowned by PT Indauda.<\/p>\n
FSPC further said the cash payment and asset and share
\ntransfer scheme would cut TPN's debt to $466.6 million.<\/p>\n
FSPC said of the $466.6 million remaining debt, $160.92
\nmillion would be restructured into a 10-year loan with a grace
\nperiod of three years and a commercial interest rate.<\/p>\n
The remaining $305.68 million will be converted to IBRA's
\nshares in TPN.<\/p>\n
FSPC noted that the agency could increase its ownership of TPN
\nin support of Kia Motors.<\/p>\n
FSPC called on KTM and TPN to reshuffle their management and
\nto soon resume the stalled national car project.<\/p>\n
The former Soeharto administration allowed TPN to import
\nSephia cars made by Kia in Korea without import duty. The cars
\nwere renamed the Timor to sell on the domestic market.<\/p>\n
Japan, the United States and the European Union protested the
\nspecial treatment and brought the case to the World Trade
\nOrganization (WTO). The WTO ruled that the Indonesian government
\nshould stop providing the company with the import duty exemption.<\/p>\n
Today, Timor is the country's best-selling car.<\/p>\n
FSPC also said it approved the debt restructuring of state-
\nowned aircraft maker PT Industri Pesawat Terbang Nusantara
\n(IPTN).<\/p>\n
Under a debt restructuring agreement with the agency, IPTN
\nwill repay its debt with a $13 million cash payment and the
\nremaining Rp 1.77 trillion debt will be settled with a debt-to-
\nequity swap method.<\/p>\n
Meanwhile, Coordinating Minister for the Economy Rizal Ramli
\nsaid on Monday that FSPC had yet to make a decision on the debt
\nrestructuring of petrochemical firm PT Chandra Asri Petrochemical
\nIndustries.<\/p>\n
He said the agreement signed by IBRA and tycoon Prajogo
\nPangestu on the debt restructuring of Chandra Asri's debt on Nov.
\n3 \"is not yet final and has not been approved by the FSPC\".<\/p>\n
Under the Nov. 3 debt restructuring agreement, Prajogo and his
\nnew company PT Zillion Petrochemical Industries will take over
\nthe total $626 million debt, which is owed to several local
\nbanks, in exchange for a 58.18 percent stake in the company.<\/p>\n
The remaining shares will be owned by IBRA (21.82 percent) and
\nJapanese firm Marubeni Corporation (20 percent).<\/p>\n
Prajogo and Zillion will repay the debt by issuing rupiah
\nconvertible bonds worth about Rp 8.6 trillion based on a fixed
\nrate of Rp 7,500 to the U.S. dollar, which will mature in 15
\nyears and carry an interest rate of 4 percent a year. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-approves-pt-timor-putra-debt-restructuring-1447893297",
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