JITF meets debt restructuring target<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The Jakarta Initiative Task Force (JITF) said on Friday it had
\nmediated some US$18.9 billion worth of debt restructuring deals
\nsince it was set up four years ago, out of the total $29 billion
\nin corporate debts that it had been tasked to help restructure.<\/p>\n
JITF chairman Bacellius Ruru told reporters that the amount
\nincluded about $4.7 billion in debts that had been restructured
\nthis year alone.<\/p>\n
\"By this, we've exceeded the $18 billion target set out in the
\nLoI (letter of intent),\" Bacellius said as reported by detik.com,
\nreferring to the economic reform program designed jointly by the
\ngovernment and the International Monetary Fund (IMF).<\/p>\n
Established in 1998 at the IMF's request, the agency was
\ntasked with restructuring and reducing the huge debts owed by the
\nprivate sector, which had been hard hit by the 1997 financial
\ncrisis.<\/p>\n
The JITF's role is to mediate debt settlements as between
\ndebtors and creditors, mostly foreigners. Dozens of companies
\nwith U.S. dollar denominated debts turned to the agency after the
\nrupiah plunged in value against the dollar.<\/p>\n
A successful restructuring would allow companies to seek new
\nloans for working capital.<\/p>\n
Bacellius said that the agency was facilitating debt talks
\ninvolving a total of 126 companies, with 53 of them being
\npublicly listed on the Jakarta Stock Exchange.<\/p>\n
Now that the JITF's mandate will expire by the end of 2003,
\nthe agency has a year left to restructure the remaining $10
\nbillion in troubled debts.<\/p>\n
Bacellius made clear that for debts to be restructured next
\nyear, companies would no longer enjoy tax discount facilities as
\nthe current incentive program was only valid until the end of
\nthis year.<\/p>\n
Previously, the JITF had been offering a 30 percent tax
\ndiscount facility on debt reduction deals. Based on the tax law,
\nany reduction in debts will be considered as income for the
\ndebtor and be subject to income tax.<\/p>\n
The JITF is not the only restructuring medium as the
\nIndonesian Bank Restructuring Agency (IBRA) is tackling another
\n$30 billion in bank loans that have become non-performing loans.<\/p>\n
Outside both agencies, there are also companies that seek debt
\nsettlements on their own.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jitf-meets-debt-restructuring-target-1447893297",
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"sponsor": "Okusi Associates",
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