Political uncertainty hampers debt restructuring<\/p>\n
JAKARTA (JP): Minister of Finance Bambang Subianto said on
\nFriday the country's political uncertainty was a major obstacle
\nto the restructuring of overseas private sector debt.<\/p>\n
\"Foreign creditors are still waiting for domestic political
\nstability.<\/p>\n
\"We need a longer time to come to a final (debt restructuring)
\nagreement,\" he said.<\/p>\n
He said so far only state-owned PT Danareksa Securities had
\njoined a debt relief scheme under the auspices of the Indonesian
\nDebt Restructuring Agency.<\/p>\n
Danareksa needed some 16 months to hammer out a debt
\nrestructuring deal with its 40 creditors.<\/p>\n
Bambang also said that as of September, only some US$3 billion
\nof the more than $23 billion in debt owed by the 280 companies in
\nthe Jakarta Initiative Task Force had been restructured.<\/p>\n
He added that in a joint survey conducted by Bank Indonesia
\nand the finance ministry, only 46 of the 298 companies responding
\nto the survey had reached a debt restructuring deal as of Sept.
\n15, 1999.<\/p>\n
The 46 companies were able to reduce their combined
\noutstanding debt from $2.1 billion to $1.8 billion through
\nrestructuring, he said.<\/p>\n
The survey also showed that 78 companies with a combined
\nforeign debt of $6.1 billion were in negotiations to restructure
\ntheir debts, he said.<\/p>\n
\"They said they needed between six to nine months before they
\nwould be able to reach a debt restructuring agreement,\" Bambang
\nsaid.<\/p>\n
Indonesia's private sector has some $67 billion in overseas
\ndebt, and many experts believe restructuring this debt is key to
\nthe country's economic recovery.<\/p>\n
The government so far has opted not to provide companies any
\ndebt bailout facility. (rei\/prb)<\/p>",
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