Sinar Mas signs pact to repay debt<\/p>\n
Dow Jones, Jakarta<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA) said the Sinar
\nMas Group signed Friday an agreement to repay US$310 million from
\nthe total $1.25 billion it owes the agency.<\/p>\n
IBRA Chairman Syafruddin Temenggung said the Widjaya family,
\nwhich controls Sinar Mas, has already paid $90 million in cash.<\/p>\n
Under the agreement, Sinar Mas will also transfer to IBRA a 16
\npercent stake in Bank Internasional Indonesia (BII) valued at $45
\nmillion, Syafruddin told a news conference. IBRA is already the
\nmajority shareholder of BII, which it took over from the Widjaya
\nfamily after the 1997 Asian financial crisis.<\/p>\n
For the remaining $175 million, IBRA will restructure and sell
\nloans owed by Sinar Mas to BII. The Widjaya family used BII to
\nlend to itself during Asia's boom years.<\/p>\n
If the amount from the loan sales doesn't cover the
\noutstanding $175 million debt, IBRA will move ahead with selling
\nstakes in companies the Widjaya family has pledged with the
\nagency, including shares in food producer Indomilk, said Raymond
\nVan Beekum, an IBRA spokesman.<\/p>\n
IBRA is under intense pressure to raise Rp 42 trillion ($4.72
\nbillion) this year to reduce a budget deficit bloated by the cost
\nof bailing out banks since the crisis.<\/p>\n
But Sinar Mas won't have to sell assets from its Asia Pulp &
\nPaper Co. unit, which is currently in talks with hundreds of
\ninternational creditors to restructure $13.4 billion in debt.<\/p>\n
Foreign creditors are concerned that IBRA's efforts to get
\nrepayment from Sinar Mas might lead to the sale of APP assets
\nbefore they complete debt restructuring talks.<\/p>\n
IBRA hopes to restructure its remaining $940 million debt with
\nSinar Mas by joining with foreign creditors under the APP debt
\nrestructuring, Van Beekum said.<\/p>\n
Earlier this week, Deutsche Bank AG and BNP Paribas filed a
\npetition in Singapore's High Court to replace APP's management
\nwith an independent judicial manager during the restructuring to
\nprotect the company's assets.<\/p>\n
Talks to restructure APP's debt have gone slowly due to the
\nhundreds of creditors involved, and the lack of clear financial
\ninformation on the company.<\/p>\n
APP stopped payment on its debt in March 2000 amid falling
\nglobal paper prices to allow it breathing space to continue
\nmaking payments to suppliers.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sinar-mas-signs-pact-to-repay-debt-1447893297",
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"sponsor": "Okusi Associates",
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