Prajogo pledges 20 companies for debt restructuring<\/p>\n
JAKARTA (JP): Prajogo Pangestu has pledged 20 companies to the
\nIndonesian Bank Restructuring Agency (IBRA) as part of his debt
\nrestructuring deal with the government, Financial Sector Policy
\nCommittee (FSPC) secretary Syafruddin Tumenggung said on Friday.<\/p>\n
Syafruddin said the 20 companies included publicly listed
\ntimber companies PT Barito Pacific Timber, and PT Tanjung Enim
\nLestari and non-listed PT Musi Hutan Persada.<\/p>\n
Syafruddin, however, said the FSPC had asked the indebted
\ntimber tycoon to first restructure the overseas borrowings of
\nBarito to make the three companies acceptable to the government.<\/p>\n
Speaking to reporters following a meeting of the committee, he
\nsaid that Prajogo had pledged the three companies to Barito's
\nforeign creditors.<\/p>\n
"If Prajogo reaches a restructuring deal with (Barito)
\ncreditors, the three companies will be set free (from the hands
\nof foreign creditors)," he said.<\/p>\n
"We have asked Prajogo to restructure the Barito debt through
\nthe mediation of the Jakarta Initiative Task Force," he added.<\/p>\n
The committee, which groups several senior economic ministers,
\nhas the final say in major corporate and bank restructuring
\nprograms.<\/p>\n
The government has demanded Prajogo provide additional assets
\nas part of the debt restructuring for petrochemical giant PT
\nChandra Asri Petrochemical Center with IBRA.<\/p>\n
Chandra Asri owes IBRA, a unit of the finance ministry, about
\nRp 3 trillion. The agency received the bad debts from ailing
\ndomestic banks. IBRA is mandated to recover and restructure the
\nbad debts of domestic banks.<\/p>\n
The petrochemical giant also owes about US$700 million to a
\nconsortium of foreign creditors led by Japanese Marubeni Corp.<\/p>\n
Under the debt restructuring plan of Chandra Asri, the
\ngovernment agreed to convert part of its loan into a 31 percent
\nstake in the company.<\/p>\n
Under the deal, Marubeni will end up with a 20 percent stake
\nin Chandra Asri, while company founder Prajogo will have a 49
\npercent stake.<\/p>\n
The debt restructuring process of Chandra Asri has been moving
\nat a slow pace.<\/p>\n
Elsewhere, Syafruddin said the FSPC had also asked Prajogo and
\nIBRA to continue negotiations with Marubeni to lower the interest
\nrate of the Chandra Asri debt to the foreign creditors.<\/p>\n
Marubeni agreed earlier this week to lower the interest rate
\nof the Chandra Asri debt to 1.5 percent above the London
\nInterbank Offered Rate (Libor), but Syafruddin said the FSPC
\nwanted the rate to be at par with Libor.<\/p>\n
"FSPC has asked IBRA and Prajogo to continue negotiations with
\nMarubeni to have better terms and conditions so that Chandra Asri
\nwill become a healthy and strong company in the future,"
\nSyafruddin said.<\/p>\n
Meanwhile, IBRA senior official Thomas Lembong said the agency
\nwas "on track" to meet its target to raise Rp 18.9 trillion in
\ncash for the 2000 state budget, which will end later next week.<\/p>\n
IBRA raised the cash through the sale of its various banking
\nassets and the recovery of the bad loans under its management.<\/p>\n
The agency last sold the Salim Group plantation firms to
\nMalaysia's Kumpulan Guthrie for $350 million. (rei)<\/p>",
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