Wicaksana gets $15 million debt haircut<\/p>\n
JAKARTA (JP): Listed trading and distribution company PT
\nWicaksana Overseas International has managed to get some US$15
\nmillion in an overall debt haircut from its creditors after it
\nsigned a US$130 million debt restructuring agreement here on
\nFriday.<\/p>\n
"The restructuring deal includes a debt repurchase program,
\nwhere the company will only pay 50 percent of the $27 million
\nportion of the total loan," said Parveen Gandhi of Indo-Sing
\nBusiness Advisory Pte. Ltd., a debt restructuring consultancy.<\/p>\n
Another $55 million of the company's total debt will be
\nrescheduled for a period of five years.<\/p>\n
The company will repay $55 million in a lump sum by the end of
\nthe fifth year, starting from now, said Gandhi.<\/p>\n
A $15 million portion of the total debt will be fully repaid
\nafter the yearly payment installments which will last for five
\nyears.<\/p>\n
The company said it would pay $1.54 million in cash up front
\nto one of the creditors that agreed to provide a five-year
\nmaturity bank guarantee amounting to $2.31 million.<\/p>\n
The bank guarantee will be used by the company to support its
\nday-to-day operations.<\/p>\n
The company will have the $5.25 million loan portion
\ntransformed into five-year convertible bonds with a fixed
\ninterest rate of 6.5 percent per year.<\/p>\n
This bond issuance is subject to the shareholders' approval at
\na planned meeting on May 17.<\/p>\n
The company also promised to divest some of its noncore
\nsubsidiaries, worth $14 million, and sell all its idle fixed
\nassets, valued at $3 million.<\/p>\n
The remaining $9.35 million, the company said, would be
\nconverted into common shares through a rights issue slated to be
\nheld within the next 6 months.<\/p>\n
If the existing shareholders did not exercise their rights
\nshare options, the creditors would take them by using the debt to
\nequity format, according to Gandhi.<\/p>\n
Gandhi said the debt restructuring agreement, which involved a
\n$15 million principal payout as well as an interest payment
\nhaircut, would be effective from May 22, after the company held
\nits shareholders' meeting.<\/p>\n
"The company has pledged all its company's assets as part of
\nthe prerequisite of this debt restructuring," Gandhi said after
\nthe signing ceremony, which was attended by creditors and head of
\nthe Jakarta Initiative Task Force (JITF) Barcelius Ruru.<\/p>\n
The company has debts with 21 foreign, joint venture and local
\ncreditors.<\/p>\n
Its net profit last year stood at Rp 99 billion on net sales
\nof Rp 2.6 trillion, compared to minus Rp 517 billion and Rp 1.8
\ntrillion, respectively, the previous year.<\/p>\n
The company attributed the net loss in 1998 to huge foreign
\nexchange losses.<\/p>\n
He said that with the applied assumptions in the debt
\nrestructuring agreement, which includes a sales growth of 25
\npercent, the company would only be able to tolerate a rupiah-U.S.
\ndollar exchange rate up to 9,375.<\/p>\n
A higher exchange rate would impede the company's ability to
\nservice its dollar debts.<\/p>\n
Head of JITF Barcelius Ruru said the success of Wicaksana
\nOverseas' debt restructuring would inspire others to follow suit.<\/p>\n
He said JITF was now handling $7.6 billion worth of debts to
\nrestructured, $3 billion of which would be completed in June.<\/p>\n
He said one of the companies involved in the above $3 billion
\nwas PT Riau Pulp.<\/p>\n
The government established JITF in early 1998 to facilitate
\nthe restructuring of the country's corporate debts, including the
\nlarge amount of overseas debts.<\/p>\n
Indonesia's private sector overseas borrowing totals about $70
\nbillion. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/wicaksana-gets-15-million-debt-haircut-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}