RI debt talks may be over this morning<\/p>\n
FRANKFURT (Agencies): Indonesia's chief negotiator in talks
\naimed at rescheduling the country's US$80 billion private sector
\ndebt said yesterday negotiations may be completed this morning.<\/p>\n
Asked if he was confident that a deal would be reached with
\nIndonesia's creditor banks, Radius Prawiro told Reuters: \"We are
\nworking on it.\"<\/p>\n
Asked if that deal could be reached on Wednesday, he said:
\n\"No, maybe tomorrow morning\".<\/p>\n
A source at Bank Indonesia said the international banking
\ncommunity would have reached a \"satisfactory\" conclusion on a
\npossible restructuring of Indonesian corporate and public debt
\nyesterday.<\/p>\n
\"We expect that the banking community will reach a consensus
\non which policy it will take in extending Indonesian debt,\" the
\nsource told Dow Jones Newswires.<\/p>\n
Earlier, U.S. banking sources said they doubted that a major
\nbreakthrough was in sight, but added that reports that the talks
\nmay run through today could imply that the two sides were
\napproaching a deal.<\/p>\n
The Nikkei English news service cited yesterday's edition of
\nthe Nihon Keizai Shimbun newspaper as saying Indonesia's creditor
\nbanks had agreed to convert short-term loans to Indonesian banks
\nto medium-term debt backed by the Indonesian government.<\/p>\n
Nikkei also cited sources familiar with the talks as saying
\nthe two sides were close to a workout of Indonesian corporate
\ndebt, including repayment terms.<\/p>\n
The report also said banks had agreed to guarantee letters of
\ncredit issued by Indonesian financial firms in order to
\nfacilitate international trade with Indonesia.<\/p>\n
The debt talks, which began in Asia before moving to New York
\nand then Frankfurt, were previously said to have been deadlocked
\nas Indonesian banks rejected calls for concessions to foreign
\ncreditors, which include some Japanese, U.S. and European banks.<\/p>\n
The least controversial element of the talks may be a decision
\nby the global banks to continue trade credits to Indonesia, as
\nthe extension is favored by some Japanese and Singaporean
\ncreditors, the sources said.<\/p>\n
But on the thornier issues of corporate debt, which was owed
\nby thousands of Indonesian companies, a workout plan appeared to
\nbe still distant, the U.S. sources said.<\/p>\n
Indonesia's Coordinating Minister for Economy, Finance and
\nIndustry Ginandjar Kartasasmita said last week he hoped the
\nFrankfurt meeting would \"finalize the general understanding with
\nthe creditors.\"<\/p>\n
A total of 13 banks are represented at the Frankfurt talks,
\nincluding the three co-chairs of the steering committee, which
\nare Deutsche, Bank of Tokyo-Mitsubishi Ltd. and Chase Manhattan
\nCorp..<\/p>\n
Radius is accompanied by central bank director Dono Iskandar;
\nGlenn Jusuf, Finance Ministry director general for financial
\ninstitutions, and Rino Effendi, an economist at state-owned
\nDanareksa Sekuritas.<\/p>\n
The meeting had originally been scheduled for May 26 in
\nFrankfurt but was delayed because conditions for discussions were
\njudged unfavorable in light of the political unrest in Indonesia
\nat that time.<\/p>\n
Since the delay was agreed, Indonesian president Soeharto has
\nstepped down and handed over power to his protege B.J. Habibie.<\/p>",
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"sponsor": "Okusi Associates",
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