Govt won't guarantee bank loans for Timor car<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad said
\nyesterday the government would not guarantee national car
\nproducer PT Timor Putra Nasional's bank loans.<\/p>\n
Mar'ie said the government guaranteed loans only for state
\nbudget financed bank loans.<\/p>\n
"We won't provide a government guarantee to Timor Putra. Even
\nstate firms cannot get a government guarantee to get loans from
\nstate banks. And remember, Timor is a private company," Mar'ie
\nsaid.<\/p>\n
Bangun S. Kusmulyono, Bank Nusa International's president,
\nsaid last week no banks would extend credit to big projects
\nwithout assessing their feasibility studies and getting a
\nguarantee or collateral.<\/p>\n
He said banks could not just lend wherever they wished because
\nthe money was not theirs but the people's.<\/p>\n
In February 1996, the government granted import duty and
\nluxury tax exemptions to PT Timor Putra Nasional as the sole
\nproducer of a so-called national car, driving its cost down 60
\npercent lower than other cars in Indonesia.<\/p>\n
Timor Putra -- controlled by President Soeharto's youngest
\nson, Hutomo Mandala Putra -- is cooperating with South Korea's
\nKia Motors Corp. to produce the national car. It currently
\nimports the Timors fully assembled from South Korea as its
\nproduction facilities are still being built.<\/p>\n
The government has also ordered three state banks and 10
\nprivate banks to finance the construction of the Timor
\nmanufacturing facilities because foreign banks canceled their
\ncredit commitments to Timor Putra due to international disputes
\nover Indonesia's national car policy.<\/p>\n
The consortium of 13 banks, led by state-owned Bank Dagang
\nNegara, was initially asked to lend US$1.3 billion to Timor
\nPutra.<\/p>\n
But Coordinating Minister for Economy and Finance Saleh Afiff
\nsaid earlier last week the government would slash the requested
\nloan amount, from domestic banks for Timor Putra, because of the
\nquestionable sales targets set for the car.<\/p>\n
Afiff said Timor's projected sale of 200,000 sedans by 1999
\nwas an overestimation. He said the country's best-selling
\nvehicle, Toyota's Kijang van, sells just 70,000 cars a year.<\/p>\n
Hutomo Mandala confirmed that his company needed $1.3 billion
\nto develop its car industry. But it will raise only $690 million
\nfrom domestic banks. The remaining $610 million will be raised
\nfrom its own equity, operational profits and its planned initial
\npublic offering next year.<\/p>\n
Abdullah Ali, president of Bank Central Asia, the country's
\nlargest privately owned bank, said last week most banks were very
\ncareful when dealing with automotive and property projects
\nbecause both dealt in consumer goods.<\/p>\n
He also said his bank had yet to decide whether it would join
\nthe consortium to finance the development of the Timor. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-wont-guarantee-bank-loans-for-timor-car-1447893297",
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