Three firms progress in debt restructuring<\/p>\n
JAKARTA (JP): PT Bakrie & Brothers, PT Polysindo Eka Perkasa
\nand PT Mulia Industrindo announced on Monday significant progress
\nin restructuring their foreign debts totaling more than US$3.1
\nbillion.<\/p>\n
Bakrie said it reached an agreement in principle with its
\ncreditors to restructure its $1.02 billion debt through a
\ndebt-to-equity swap scheme. It hopes to clinch a final deal in
\nAugust.<\/p>\n
Polysindo, Indonesia's largest integrated polyester
\nmanufacture, said it was in the final stages of preparing a
\ncomprehensive restructuring proposal for its $1.4 billion debt,
\nwith a final agreement expected by August.<\/p>\n
Mulia Industrindo, according to Dow Jones Newswires, has
\nclinched an agreement in principle with its creditors to
\nrestructure its $550 million debt.<\/p>\n
\"The debt restructuring process involves the establishment of
\na master special purpose vehicle which will own 80 percent of
\nBakrie shareholdings in five companies,\" Bakrie president Iwan
\nSjarkawi told reporters.<\/p>\n
The Bakrie shareholdings are the 2.2 percent stake in the New
\nYork-listed satellite phone network Iridium LLC, 20 percent stake
\nin PT Arutmin Indonesia, 25.49 percent stake in PT Bakrie Kaisei
\nCorp., 70 percent stake in PT Bakrie Electronics Company and 52.4
\npercent stake in PT Bakrie Sumatra Plantations.<\/p>\n
In addition, he added, the special purpose vehicle, to be 80
\npercent controlled by creditors, also will own 30 percent of
\nBakrie through the issuance of new shares on a fully diluted
\nbasis.<\/p>\n
After the dilution, the Bakrie family will lose control of the
\nBakrie & Bros group, with its equity stake falling from almost 51
\npercent to 17.45 percent, Sjarkawi added.<\/p>\n
He said 69 percent of the total creditors voted on the
\nrestructuring proposal in Singapore on April 20, with 73 percent
\nof them responding positively to the debt-equity swap concept.<\/p>\n
\"The voting process was witnessed by the Jakarta Initiative
\nTask Force for the benefit of all the lenders in general and the
\nLaw Debentures Trustees Ltd. of the United Kingdom as the
\ntrustees of the holders of certain debt instruments of Bakrie,\"
\nSjarkawi added.<\/p>\n
Analysts welcomed the debt-restructuring progress as a strong
\nsignal of increasing foreign investor confidence in the country
\nand an evidence of more Indonesian debtors working in good faith
\nto resolve their debt problem.<\/p>\n
They see the resolution of the private sector's foreign debts,
\nestimated at around $80 billion, including those owed by banks,
\nas quite crucial for restoring bank lending to the business
\nsector.<\/p>\n
State-owned financial service company PT Danareksa last week
\nbroke the stalemate in the debt resolution through what analysts
\ncalled a landmark deal.<\/p>\n
Danareksa concluded the first major foreign debt restructuring
\nagreement last Thursday, involving $196 million in promissory
\nnotes, since the country's economic crisis began.<\/p>\n
Polysindo<\/p>\n
Polysindo's chief financial officer M.Gopalakrishnan said
\nseparately that the company, along with its financial advisers
\nDonaldson, Lufkin & Jenrette Asia Ltd., and with the guidance of
\nthe Jakarta Initiative Task Force, was finalizing its debt
\nrestructuring proposal.<\/p>\n
\"We are making every effort to expedite an inherently
\ndifficult and arduous process which normally takes several
\nmonths, even in developed countries,\" Gopalakrishnan said, adding
\nthat the final proposal was expected by August.<\/p>\n
He noted that while the polyester industry worldwide continues
\nto reel under a severe price downturn, Polysindo has been able to
\noperate its manufacturing facilities at 50 percent to 55 percent
\ncapacity utilization levels.<\/p>\n
\"We have been successful in achieving a 50 percent export
\ncontent in our current sales turnover but at substantially
\nreduced margin levels,\" he said.<\/p>\n
Polysindo's finance director P. Manohar added that with no new
\nmajor polyester capacities coming up in the near future and
\ninventories drying up fast, the firm expected prices to improve
\nconsiderably.<\/p>\n
\"This should enable Polysindo to report better earnings,\"
\nManohar said.<\/p>\n
Publicly listed Polysindo and its subsidiaries have often been
\nrewarded by the government as one of Indonesia's largest
\nexporters of textile and garments.<\/p>\n
PT Mulia Industrindo -- a parent company of PT Muliaglass, PT
\nMuliakeramik and Mulia Finance BV -- also announced that it had
\nreceived creditors' approval on its debt restructuring, split
\ninto two tranches amounting respectively to $440 million and $110
\nmillion.<\/p>\n
The $440 million tranche will be converted into an eight-year
\nloan with step-up interest rate features, the company said.<\/p>\n
The second tranche will be converted into a loan that can be
\nrepaid on an irregular basis in the next eight years whenever the
\ncompany has excess cash, it added.<\/p>\n
Meanwhile, informed sources said PT Astra International would
\nmost likely strike a final restructuring deal on its $1 billion
\ndebt later this week. (02)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/three-firms-progress-in-debt-restructuring-1447893297",
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