Pertamina set to own 15% in TPPI: Official<\/p>\n
JAKARTA (JP): State-owned oil and gas company Pertamina may
\ngain up to a 15 percent stake in PT Trans Pacific Petrochemical
\nIndotama (TPPI), after lending its approval to resuming the long-
\ndelayed construction of the petrochemical center.<\/p>\n
Secretary of the Financial Sector Policy Committee (FSPC),
\nSyafruddin Temenggung, said on Friday that the Committee and
\nPertamina had agreed on a preliminary deal for a scheme to
\nfinalize TPPI's construction, a crucial ingredient in the
\ncompany's debt restructuring program.<\/p>\n
About 65 percent of the TPPI aromatics plant has already been
\ncompleted, and some $400 million is needed to bring it on stream.<\/p>\n
Syafruddin said that to jump start TPPI's aromatics'
\nproduction, Pertamina would join in a product swap scheme.<\/p>\n
\"We will use Pertamina's products to raise the funds, which
\nwill finance the project's completion,\" Syafruddin told reporters
\nafter a meeting at his office with Japanese creditors of TPPI.<\/p>\n
The FSPC handles high profile debt workouts of the Indonesian
\nBank Restructuring Agency (IBRA), which took over TPPI loans from
\nlocal banks hit by the 1997 economic crisis.<\/p>\n
Syafruddin fell short of explaining which Pertamina products
\nTPPI would use to raise the capital.<\/p>\n
In addition to the expected production of aromatics, TPPI will
\nalso produce refined products requiring oil and gas supplies from
\nPertamina.<\/p>\n
Once full production begins, Pertamina will continue to supply
\nTPPI with raw materials in exchange for the latter's aromatics,
\nhe said.<\/p>\n
For that, Pertamina would gain a stake in TPPI ranging between
\n10 percent and 15 percent, he added.<\/p>\n
TPPI was 70 percent owned by the Tirtamas Group and 20 percent
\nby a unit of Thailand's Siam Cement PLC, Tuban Petrochemical Pte.
\nLtd. The remaining 10 percent is evenly split between Itochu and
\nNissho Iwai.<\/p>\n
Tirtamas has reportedly transferred its entire 70 percent
\nstake to IBRA after the group's debts to local banks were taken
\nover by the agency.<\/p>\n
Construction at TPPI came to an halt in early 1998, after $900
\nmillion had been spent -- about $200 million out of the equity
\nand $700 million out of contractors' funds.<\/p>\n
Foreign investors had been reluctant to resume the project
\nciting Indonesia's unfavorable investment climate.<\/p>\n
Pertamina became involved upon urging from the government
\nfollowing lobbying by TPPI's Japanese contractors.<\/p>\n
Syafruddin estimated that TPPT would be completed by 2003,
\nwith production beginning in 2004.<\/p>\n
\"We'll treat Pertamina as the senior creditor, the first cash
\nreceived (by TPPI) will go to Pertamina,\" he explained.<\/p>\n
The remainder, he said, would be evenly divided among TPPI's
\ncontractors and its shareholders.<\/p>\n
He also dismissed talk that the government was set to sell its
\nloans in PT Chandra Asri Petrochemical Center to foreign parties.<\/p>\n
The government, he said, still prioritized a restructuring
\ndeal with Chandra Asri's creditors before considering a sale.<\/p>\n
\"A strategic partner would be an option if we can't come to a
\nrestructuring deal,\" he said.<\/p>\n
Earlier, Syafruddin said that one strategic investor and an
\ninvestment bank had expressed interest in a Chandra Asri stake.<\/p>\n
Offers had ranged from between $800 million and $1 billion for
\nbuying out Chandra Asri, according to Syafruddin.<\/p>\n
Chandra Asri owes some $730 million to a foreign consortium
\nled by Japan's Marubeni Corp., which also controls a 20 percent
\nstake in the company.<\/p>\n
Chandra Asri owes another $464 million to IBRA after the
\nlatter took over the loans from local banks hit by the 1997
\neconomic crisis.<\/p>\n
IBRA and the Japanese creditors have been deadlocked over a
\nrestructuring scheme for Chandra Asri.<\/p>\n
Previous deals had been scrapped following charges they were
\noverly advantageous to the Japanese side and disadvantageous to
\nIBRA.<\/p>\n
But after more than two years without any deal being reached,
\npressure from the Japanese government to speed up the talks has
\nbuilt up.<\/p>\n
Syafruddin said the prolonged negotiations had hurt the value
\nof Chandra Asri's assets, with skilled workers leaving the
\ncompany.<\/p>\n
The FSPC now planned only to improve the makeup of the latest
\nrestructuring deal reached last April, he said.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-set-to-own-15-in-tppi-official-1447893297",
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