RI and creditors set resolution framework<\/p>\n
NEW YORK (Agencies): Creditor banks and Indonesia agreed
\nThursday on a broad set of principles to provide a framework for
\nbilateral negotiation on the country's private external debts.<\/p>\n
According to a joint statement, the 13-member bank committee
\nand a senior Indonesian delegation agreed to a framework
\n\"inspired by Mexico's Ficorca program.\"<\/p>\n
The principles agreed to \"are intended to provide private
\nsector debtors with protection against exchange-rate risks and to
\nassure debtors and creditors of the availability of foreign
\nexchange needed to service restructured debt of the private
\nsector.\"<\/p>\n
Participation in the program will be voluntary and will
\nrequire the consent of both the debtor and its creditors.<\/p>\n
Both parties acknowledged the process remained in its infancy.
\nBankers said they want proof Indonesia is complying with terms of
\nits recent agreement with the International Monetary Fund (IMF)
\nbefore they will sign off on any plan.<\/p>\n
\"We would insist that they are in compliance with the IMF
\nprogram before we agree to any debt restructuring,\" one banking
\nsource close to the proceedings said.<\/p>\n
According to the statement, both debtors and creditors will be
\nfree \"to make whatever other arrangements they agree upon, either
\nin conjunction with or in lieu of participation in the program.\"<\/p>\n
Both parties acknowledged the process remained in its infancy.
\nBankers said they want proof Indonesia is complying with terms of
\nits recent agreement with the International Monetary Fund (IMF)
\nbefore they will sign off on any plan.<\/p>\n
\"We would insist that they are in compliance with the IMF
\nprogram before we agree to any debt restructuring,\" one banking
\nsource close to the proceedings said.<\/p>\n
Before developing specific terms of restructuring, lenders
\nsaid they wanted a more thorough examination of the country's
\neconomic health and a breakdown of the corporations' debt loads.<\/p>\n
The request for detailed information posed a challenge for the
\nIndonesians, Radius Prawiro, the chief Indonesian negotiator
\nsaid.<\/p>\n
\"We must go back and come up with all the data they have asked
\nfor,\" Radius said when asked what roadblocks the negotiators must
\nclear.<\/p>\n
This involves both economic and financial data, he said, such
\nas Indonesia's current account balance and details of the \"about
\n$68 billion in private-sector corporate debt.\"<\/p>\n
Radius also said there were several billion dollars ($12.46
\nbillion, according to the latest official data released in
\nJakarta) more corporate debt which was owed by companies
\ncontrolled by the government.<\/p>\n
Indonesia's legal counsel, Mark Walker of law firm Cleary
\nGottleib, said leaving the meeting, \"We wanted to put forward a
\nconceptual approach and we had a very good two-day discussion on
\nthe approach.\"<\/p>\n
Walker declined to comment on what level of foreign-exchange
\ninsurance the country would provide.<\/p>\n
\"It will be a formula,\" he said, adding that the funds to
\nfinance such a program could come either from the International
\nMonetary Fund, the World Bank, the G-7 countries or Japan.<\/p>\n
\"We did not discuss any grace period for the repayment of the
\ndebt,\" Radius said. \"Of course, we are prepared to be flexible.\"<\/p>\n
Radius added that the talks did neither discuss any exchange
\nrate that would be desirable for the debt restructuring plan.<\/p>\n
Walker said Indonesia would like to start the program in the
\nsecond half of 1998. He also said that the next meeting between
\nIndonesia and the bank steering committee in early May could take
\nplace in Tokyo.<\/p>\n
According to the statement, working bank subcommittees were
\nformed to deal with specific aspects of Indonesia's external debt
\nand will begin meeting immediately.<\/p>\n
The statement said that in addition to private external debt,
\nongoing meetings will also \"address measures related to
\nIndonesia's access to trade finance and interbank lines,
\nincluding the clearing up of payment arrears.\"<\/p>\n
The bank steering committee is co-chaired by Chase Manhattan
\nBank, Deutsche Bank AG and Bank of Tokyo-Mitsubishi. Other
\nmembers of the steering committee are ABN Amro, Bank of America,
\nBanque Nationale de Paris, Citibank NA, HSBC Holdings, the Korea
\nDevelopment Bank, Oversea Chinese Banking Corporation, Sanwa
\nBank, Standard Chartered and Sumitomo Bank.<\/p>\n
IMF -- Page 6<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/ri-and-creditors-set-resolution-framework-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }