JITF on track to meet debt restructuring target<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
The Jakarta Initiative Task Force (JITF), which facilitates
\nthe restructuring of the country's huge corporate debt, is on
\ntrack for meeting this year's restructuring target of US$14
\nbillion in debt, despite the unfavorable macroeconomic situation.<\/p>\n
Secretary of the Financial Sector Policy Committee (FSPC)
\nSyafruddin Temenggung said on Tuesday that as of mid-December,
\nJITF had managed to restructure some US$13.5 billion in
\ncorporate debt.<\/p>\n
FSPC, which groups several senior economic ministers led by
\nthe coordinating minister for the economy, has the final say on
\nthe major corporate and bank restructuring program.<\/p>\n
In 1998, the government set up the agency to help accelerate
\nthe restructuring of the country's massive corporate debt,
\nparticularly overseas debt, which totaled around $70 billion.<\/p>\n
The task force plays a mediating role between debtors and
\ncreditors, but they cannot be forced to use the mediation
\nfacilities provided by JITF.<\/p>\n
Restructuring the country's corporate debt has been a major
\nheadache, partly due to the volatility of the rupiah and rising
\ninterest rates.<\/p>\n
A successful debt restructuring program would bring back
\nconfidence among foreign investors and therefore prompt them to
\nkeep flowing their lines of credit to domestic industries.<\/p>\n
Separately, State Minister of State Enterprises Laksamana
\nSukardi said on Tuesday that the Indonesian Bank Restructuring
\nAgency (IBRA) had established a team to oversee the planned
\nmerger of five banks under the supervision of the agency.<\/p>\n
He reaffirmed an earlier statement that the formal merger of
\nthe ailing banks would be completed before the end of this year.<\/p>\n
However, Syamsuddin reiterated that the government was not
\naiming for the planned legal merger to be finalized this year,
\nsaying, \"The legal merger does not have to take place this year.\"<\/p>\n
The banks are: Bank Universal, Bank Bali, Bank Patriot, Bank
\nPrima Expres and Bank Artha Media. The banks must be merged to
\navoid closure.<\/p>\n
Syafruddin also said that the government had yet to decide
\nwhich of the five banks would be \"the surviving bank\".<\/p>\n
Commenting on a plan to divest Bank Central Asia (BCA), he
\nsaid that the FSPC had not yet made any decision on whether or
\nnot to delay the sale.<\/p>\n
He said: \"There's no policy yet on whether to delay it or
\nnot.\"<\/p>\n
IBRA, which controls BCA, has been targeted to complete the
\nsale of the government stake in BCA before the end of this year.<\/p>\n
However, certain senior government officials indicated earlier
\nthat the sale might have to be delayed again as foreign bidders
\nneeded more time to carry out their due diligence investigations.<\/p>",
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