Weak rupiah hampers debt restructuring target: JITF<\/p>\n
JAKARTA (JP): A weaker and volatile rupiah coupled with
\npolitical instability have hampered debt restructuring
\nnegotiation of indebted companies under the Jakarta Initiative
\nTask Force (JITF), an executive at the task force said on Monday.<\/p>\n
JITF chairman Bacilius Ruru said unfavorable economic
\nconditions as well as lingering political instability are
\nobstructions to current and upcoming debt restructuring talks.<\/p>\n
\"The weaker rupiah, macroeconomics, and political instability
\nshould be considered when determining (JITF's) target,\" Ruru told
\nreporters following the induction ceremony of the Jakarta Stock
\nExchange's new board of commissioners.<\/p>\n
Ruru replaced Erry Riyana Hardjapamekas as the exchange's new
\nchief commissioner.<\/p>\n
However, Ruru stopped short of suggesting the government or
\nthe International Monetary Fund (IMF) lower JITF's next target.<\/p>\n
\"We just want them (the government and the IMF) to take into
\naccount the (above) factors,\" he said.<\/p>\n
The government set up JITF in 1998 to help accelerate the debt
\nrestructuring process of the country's private sector.<\/p>\n
The task force plays only a mediating role between debtors and
\ncreditors. Nonetheless, it's debt restructuring target is part of
\nreform target contained in the Letter of Intent (LoI) signed with
\nthe International Monetary Fund (IMF).<\/p>\n
Indonesia must meet the LoI target in order to receive the
\nIMF's three-year economic bail out program worth US$5 billion.<\/p>\n
Ruru further warned that because of the weaker rupiah, some
\ncompanies, whose debts have already been restructured, might ask
\nto renegotiate their debt restructuring deals.<\/p>\n
\"Considering the current rupiah rates, it (renegotiation) is
\nquite possible,\" he said.<\/p>\n
\"But so far we haven't received any appeals from restructured
\ncompanies asking for new mediation,\" Ruru added.<\/p>\n
The preferred rupiah rate, he said, should be at least equal
\nto that used under the state budget, which the government plans
\nto revise to 9,600 from 7,800 against the greenback.<\/p>\n
In the past few months, however, the rupiah has been trading
\nat above 10,000 to the dollar on continued political bickering
\nthat gave rise to speculative rupiah trading.<\/p>\n
Another problem in JITF's debt restructuring program, he
\ncontinued, was that more companies with smaller debts sought the
\ntask force's mediation.<\/p>\n
He said the number of companies with over $100 million in
\ndebts has declined, with the average debt per company now ranging
\nbetween $100 million and $50 million.<\/p>\n
\"Note that the number of man-hours we must invest to
\nrestructure debts worth $1 billion and those worth $50 million is
\nthe same,\" he explained.<\/p>\n
Even if JITF were to be given the same target as last year,
\nits task will be more time consuming, according to Ruru.<\/p>\n
\"I'm not saying it (debt restructuring) has become more
\ndifficult, but that this should be considered when determining
\n(JITF's) next target,\" he added.<\/p>\n
He said he hoped to bring up this issue when meeting the
\ngovernment and the IMF to discuss JITF's new target.<\/p>\n
JITF's target in the last LoI was set at $12 billion, which
\nthe task force should have completed by April this year.<\/p>\n
Commenting on JITF's last target, Ruru said the task force
\nmanaged to mediate debt restructuring deals worth $11.8 billion,
\njust slightly below its target.<\/p>\n
\"I think under present conditions the figure ($11.8 billion)
\ncould be seen as some achievement,\" he said.<\/p>\n
He said JITF had reported its result to the IMF but had
\nreceived no feedback.<\/p>\n
\"Neither can I say they've (IMF) accepted the figure, nor that
\nthey don't have any complaints,\" he said. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/weak-rupiah-hampers-debt-restructuring-target-jitf-1447893297",
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