S'pore court rules against APP creditors<\/p>\n
Dow Jones, Singapore<\/p>\n
The Singapore High Court Thursday ruled against a petition by
\ntwo European creditors of Asia Pulp & Paper Co. to appoint
\nindependent judicial managers for the debt-ridden Indonesian
\ncompany.<\/p>\n
\"If I granted the JM (judicial management), there will be a
\nlot of problems, not insurmountable but very difficult,\" said
\njudge Lai Siu Chiu, delivering the verdict.<\/p>\n
As APP was incorporated in Singapore as a holding company, the
\njudicial managers will find it difficult to restructure the
\ngroup's units in Indonesia and China, Lai said.<\/p>\n
The verdict is against the petition by Deutsche Bank Ag (DB)
\nand BNP Paribas, which initiated court action in June to recover
\nthe US$193 million and $20 million that APP owes them
\nrespectively.<\/p>\n
The court's ruling means APP's current management can stay on
\nand the company can continue with the restructuring led by
\nIndonesian Bank Restructuring Agency (IBRA).<\/p>\n
The two European banks had argued that IBRA isn't equipped to
\nmandate APP's restructuring due to conflict of interest.<\/p>\n
IBRA's dual roles as creditor to PT Bank International
\nIndonesia, or BII, and lead manager of APP's restructuring
\nprocess would put it in an awkward position, the banks told the
\ncourt. APP's biggest shareholder, the Widjaja family, once
\ncontrolled BII.<\/p>\n
The appointment of judicial managers from international
\naccounting firms will restore faith and trust among existing
\ncreditors and guarantees fair play in APP's restructuring, the
\ntwo European banks had argued.<\/p>\n
However, Justice Lai said: \"The Widjaja family can deliver
\nwhat is required to repay if they pool their resources together.\"<\/p>\n
Last month, IBRA, backed by other big creditors, demanded that
\nAPP make a $100 million cash payment as part of the restructuring
\nprocess. Part of the deal included a $30 million monthly payment
\ninto an escrow account.<\/p>\n
APP's lawyers said there is currently $60 million in the
\nescrow account.<\/p>\n
\"If the management can come up with the money, the
\nrestructuring will hold,\" Judge Lai said.<\/p>\n
She warned that APP is the largest emerging market defaulter
\nand its Widjaja family-controlled current management must be more
\nserious in their approach toward the restructuring process.<\/p>\n
IBRA representatives, an umbrella steering committee of
\ncreditors and APP's management are meeting in Singapore Thursday
\nto discuss issues related to the company's cashflow.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/spore-court-rules-against-app-creditors-1447893297",
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