Govt forms new unit to speed up debt restructuring<\/p>\n
JAKARTA (JP): The government announced on Tuesday the
\nestablishment of a new unit called the one-stop facilitation
\ngroup designed to help accelerate the process of restructuring
\nprivate sector debt.<\/p>\n
The chairman of the Jakarta Initiative Task Force, Jusuf
\nAnwar, said the one-stop facilitation services to be provided by
\nthe interministerial unit were expected to alleviate various
\nadministrative and regulatory obstacles posed by the bureaucracy
\nin restructuring corporate debt.<\/p>\n
\"The main objective of the one-stop facilitation group is to
\nhelp solve administrative and regulatory impediments to corporate
\nrestructuring,\" he said on the sidelines of a debate on the new
\ncentral bank bill by the House of Representatives Commission VIII
\nfor finance and state budget.<\/p>\n
The country's private sector is saddled with some US$80
\nbillion in overseas debt and more than Rp 600 trillion in
\ndomestic debt. The sharp depreciation of the rupiah against the
\nU.S. dollar and the country's economic crisis have prevented most
\ncompanies from repaying their debt.<\/p>\n
The government hopes to restructure the debt through debt
\nreduction measures and debt-to-equity deals to prevent massive
\nlayoffs and preserve the country's assets.<\/p>\n
The Jakarta Initiative Task Force was established last year to
\nencourage debtors and creditors to opt for out-of-court debt
\nsettlements rather than going to commercial courts for bankruptcy
\nproceedings.<\/p>\n
Jusuf said the one-stop facilitation group would complement
\nthe Jakarta Initiative Task Force, adding the group's members
\nwould include senior officials from various ministries, the
\ncentral bank, the Indonesian Bank Restructuring Agency and the
\nIndonesian Debt Restructuring Agency.<\/p>\n
He stressed the new unit would only serve as a mediator and
\nfacilitator in the debtor-creditor negotiation process.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita said in a statement the ongoing bank
\nrestructuring process only would be effective in driving the
\ncountry's economic recovery if implemented together with the
\nrecovery of the real sector through corporate restructuring.<\/p>\n
\"This will get the commercial sector going again and at the
\nsame time directly revive the employment sector,\" he said.<\/p>\n
Finance minister Bambang Subianto hoped negotiations between
\ndebtors and local and foreign lenders would result in timely
\nprivate sector debt restructuring.<\/p>\n
The government recently launched major bank restructuring
\nmeasures in a bid to clean up the banking industry, which is a
\nkey factor in the country's economic recovery.<\/p>\n
However, an effective solution to the country's private sector
\ndebt overhang also is critical for economic recovery,
\nparticularly in allowing foreign lenders to resume making loans
\nto the real sector.<\/p>\n
Jusuf said the Jakarta Initiative Task Force was currently
\nassisting in the restructuring of at least 143 companies,
\nincluding state-owned enterprises with total outstanding loans of
\n$18.41 billion in foreign exchange debt and Rp 8.69 trillion in
\nlocal debt.<\/p>\n
\"No less than 15 of these companies, with outstanding loans
\ntotaling $1.75 billion and Rp 354 billion, have reached an
\nagreement with their creditors.\"<\/p>\n
\"These companies have bad debts ranging from less than Rp 30
\nmillion to over $1.2 billion,\" he added. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-forms-new-unit-to-speed-up-debt-restructuring-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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