ITB seeks solution to corporate debts<\/p>\n
JAKARTA (JP): The 34,000-strong alumni association of the
\nBandung Institute of Technology (ITB) called on the government
\nyesterday to set up a team to resolve the corporate debt problem.<\/p>\n
The association's spokesman, Amir Sambodo, told a hearing with
\nmembers of the House of Representative's Commission V that the
\nteam for the Supervision and Resolution of Problem Debt would
\nhelp resolve defaulted corporate debts and supervise the
\nrestructuring of corporations unable to pay offshore debts.<\/p>\n
\"The market still reacts negatively to the rupiah because the
\ngovernment has not yet issued any definite policy to settle
\nprivate debts,\" he said.<\/p>\n
The government has set up a special economic and monetary
\ncouncil to oversee the nation's intended reforms. It is chaired
\nby President Soeharto.<\/p>\n
But the intended reforms have not impressed the market as the
\nvalue of the rupiah continues to slide against the U.S. dollar.<\/p>\n
\"According to my friends at security companies, the market
\nisn't sure if our government, private companies and our people
\nare concerned about corporate debt and are willing to settle the
\nmatter,\" Amir said.<\/p>\n
The country's external debt stood at about US$140 billion at
\nthe end of last year, or about two-thirds of the gross domestic
\nproduct. About $30 billion was estimated to mature by March.<\/p>\n
About $65 billion of the debt lies in corporate hands and the
\nrest with the government.<\/p>\n
Amir said the team should involve the government,
\nrepresentatives of the Indonesian Chamber of Commerce and
\nIndustry and experts.<\/p>\n
He said corporations with defaulted debts amounting to more
\nthan the value of their assets and facing liquidation could ask
\nfor restructurization after consulting creditors.<\/p>\n
The team can supervise the restructuring in agreement with
\ncreditors who are not affiliated with the corporation.<\/p>\n
He said the team could use a foreign financial consultant or
\nsecurities company to represent the creditors and nation's
\ninterest to search for buyers of up to 51 percent of the shares
\nissued or transferred in the restructuring process.<\/p>\n
Foreign buyers would be prioritized, and the rest of the
\nshares would be allocated to social, religious and national
\nbodies, including the workers cooperatives. (09)<\/p>",
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"sponsor": "Okusi Associates",
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