IBRA has yet to obtain Eka's guarantee<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\nhas so far failed to obtain the personal guarantee of business
\ntycoon Eka Tjipta Widjaja in return for the guarantee given by
\nthe agency on loans made by Bank Internasional Indonesia (BII) to
\nEka's business units.<\/p>\n
IBRA official Tom Lembong said on Thursday that the Widjaja
\nfamily was still awaiting the debt restructuring result of Asia
\nPulp & Paper (APP), and the development in BII.<\/p>\n
\"In the last dialogue with the Widjaja family, they said that
\nthey still wanted to see the outcome for BII and APP,\" Tom said.<\/p>\n
\"In their view, the restructuring process of APP, and the
\nextent of their obligation to BII are still not clear. When it
\nhas become concrete, then they will formulate the form of Eka's
\npersonal guarantee,\" he added.<\/p>\n
IBRA claimed last month that it was close to securing Eka's
\npersonal guarantee.<\/p>\n
IBRA, on behalf of the government earlier this year, issued to
\nBII a guarantee of the repayment of around US$1.2 billion in
\nloans made by BII to certain Sinar Mas companies, which are
\nmostly operating subsidiaries of Singapore-based APP, in a bid to
\ninsulate BII from the potential negative impact of possible
\ndefault on those loans.<\/p>\n
The Sinar Mas group and APP were founded by Eka, while BII was
\nthe financial arm of the group. But the bank is now controlled
\nby IBRA after the government financed the majority cost of the
\nbank's recapitalization program. There is a possibility that IBRA
\nwill merge BII with a stronger bank, as the former may not be
\nable to meet the year-end minimum 8 percent capital adequacy
\nratio (CAR) requirement.<\/p>\n
BII became vulnerable to developments at Sinar Mas after the
\ngroup was clearly unable to repay APP's debt of more than $12
\nbillion to its foreign bondholders.<\/p>\n
In return for the IBRA guarantee, Sinar Mas had already
\npledged assets to the agency currently estimated to be equal to
\naround 145 percent of the BII loans to the group. Four of Eka's
\nsons have also given their personal guarantees. But the agency
\ninsisted that Eka must also give his personal guarantee.<\/p>\n
Tom said that the pledged assets were \"clean and free,\"
\nmeaning that they had not been pledged to other creditors,
\nincluding APP's.<\/p>\n
The assets which were pledged included land, buildings and
\nmachinery of PT Indah Kiat Pulp & Paper, PT Pabrik Kertas Tjiwi
\nKimia, PT Pindo Deli Pulp and Paper Mills, PT Lontar Papyrus Pulp
\n& Paper, PT Puri Nusa Ekapersada, and shares of certain Sinar Mas
\ncompanies, including those in the holding companies of PT
\nWirakarya Sakti and PT Arara Abadi, forestry concession companies
\nthat are timber suppliers to APP.<\/p>\n
IBRA said that it had no immediate plan to liquidate the
\npledged assets.<\/p>\n
\"IBRA remains committed to working with the other creditors
\nand Sinar Mas to seek a fair, transparent and expeditious debt
\nrestructuring (of Sinar Mas) that maximizes debt recovery and
\nbalances the interests of all creditors, APP and the people of
\nIndonesia,\" the state agency said in a statement.<\/p>\n
\"Consistent with these objectives, IBRA has no present
\nintention to immediately foreclose or liquidate the assets taken
\nas security,\" it added.<\/p>\n
APP's bond holders had expressed concern that they would be
\nput in a disadvantageous position because assets and shares in
\nsome APP units had been pledged to IBRA.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-has-yet-to-obtain-ekas-guarantee-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}