PT Indorayon fails to make coupon payments<\/p>\n
JAKARTA (JP): Publicly listed pulp and rayon fiber maker PT
\nInti Indorayon Utama announced on Tuesday that it would be unable
\nto meet coupon payments due this year.<\/p>\n
The company said the temporary closure of its mill and the
\nadverse impact from the current economic crisis caused the
\ndefaults.<\/p>\n
"The temporary mill closure impacts on Indorayon's ability to
\nmeet coupon payments for its 9.5 percent senior notes due 2000
\nand 7 percent euro convertible due 2006," the company said in a
\nstatement.<\/p>\n
Indorayon was due to make a coupon payment of US$3.4 million
\non April 15, 1999, for its senior notes and $4.2 million on May
\n2, 1999, for its euro convertible.<\/p>\n
Indorayon said it had appointed Donaldson, Lufkin & Jenrette
\nas its financial advisor and was crafting plans to implement a
\ndebt-restructuring program.<\/p>\n
The company said it planned to hold a meeting with its
\ncreditors over the next few weeks.<\/p>\n
Indorayon has some $360 million in overseas loans.<\/p>\n
Indorayon said its operation continued to be affected by civil
\ndisturbances combined with a lack of law and order enforcement at
\nPorsea, North Sumatra, where its primary production facility is
\nlocated.<\/p>\n
Deliveries of raw materials to the Porsea mill came to a
\nstandstill for nearly four months last year and had been
\nsuspended since January this year, resulting in significant
\nlosses in production and revenue, the company said.<\/p>\n
"The situation was further confused by a statement issued in
\nlate March in which the President announced Porsea mill
\noperations would be temporarily suspended, due to attacks on
\nIndorayon property and personnel and general rioting in the
\nsurrounding area," the statement said.<\/p>\n
President B.J. Habibie issued the temporary closure order
\nthrough North Sumatra Governor T. Rizal Nurdin, raising confusion
\namong Indorayon's management, who had not received any official
\nclosure statement.<\/p>\n
The President also ordered an independent team to audit the
\nimpact of Indorayon's operation on the environment and people's
\nhealth.<\/p>\n
Nongovernmental organizations and locals have accused
\nIndorayon of polluting the environment, including the scenic Toba
\nLake.<\/p>\n
"Indorayon is committed to protecting natural resources in its
\ncare," the company said in defense.<\/p>\n
A company representative said it was impossible for Indorayon
\nto damage the Lake Toba environment because the geographical
\nposition of the Porsea pulp mill was lower than the position of
\nLake Toba.<\/p>\n
Analysts said Habibie's decision to temporarily suspend
\noperations at the mill was based on political considerations to
\nquell increasing local unrest.<\/p>\n
Economists said closing down Indorayon would create more
\ndifficulties for the company to meet its foreign debts, which is
\ndetrimental to rebuilding foreign investor confidence.<\/p>\n
Indorayon is a unit of the Raja Garuda Mas Group, a
\ndiversified conglomerate controlled by businessman Sukanto
\nTanoto.<\/p>\n
Sukanto also controls the Singapore-registered Asia Pacific
\nResources International Holdings Ltd., which decided in January
\nthis year to divest its Indorayan holdings. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pt-indorayon-fails-to-make-coupon-payments-1447893297",
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