15 firms seal deals on debt restructuring
15 firms seal deals on debt restructuring
JAKARTA (JP): Chairman of the Jakarta Initiative Task Force
Yusuf Anwar announced on Monday that 15 companies reached a debt
restructuring agreement with their creditors over US$1.5 billion
in foreign exchange debt and Rp 900 billion in local currency
debt.
He said they were part of the 168 indebted companies which
enlisted assistance from the task force to facilitate a debt
restructuring process with creditors.
He said the companies held more than Rp 10 trillion in local
currency debt and $11 billion in foreign exchange debt.
"We will accelerate the restructuring process of these
companies to create more successful stories," he told reporters
on the sidelines of a one-day seminar on good corporate
governance.
He explained the task force would work together with the
Indonesian Bank Restructuring Agency (IBRA) because about 50
percent of the debts were linked to the agency.
The government, he added, would announce details of the
restructuring deal for these debtors on Friday.
IBRA has assumed over Rp 100 trillion in nonperforming loans
dispensed by the country's seven state banks to 1,200 companies.
The government said in its latest letter of intent to the
International Monetary Fund that at least 20 of the largest
debtors at the state banks would be encouraged to join a
government-backed restructuring deal.
IBRA chairman Glenn S. Yusuf said last week that the 20
largest debtors owed Rp 60 trillion in nonperforming loans at the
state banks.
A debt restructuring deal of the major debtors is expected to
provide momentum for the restructuring of the overall real
sector, which together with the bank restructuring program is
essential for the country's economic recovery.
Yusuf said the largest obstacle toward a debt restructuring
deal was to have both the creditors and the debtors to come
together to negotiate a restructuring deal.
"It is difficult to encourage both debtors and creditors to
sit at the same table," he said.
Local companies have about $65 billion in overseas debts and
more than Rp 600 trillion in local debts.
The government launched the Indonesian Debt Restructuring
Agency (INDRA) in August last year to ensure the availability of
foreign currency at the best exchange rate level for debtors who
have reached a restructuring agreement with their debtors.
But INDRA announced last week that it would extend the
deadline for entry to its program from June 30 to December 31
because there have been no takers so far.
INDRA chairman Sumitro said on Thursday that most companies
were expected to reach agreement with their foreign creditors
during the second half of the year.
"This is because companies are still facing limited cash flow,
unpredictable inflation rates, as well as unfavorable (social and
political) conditions," he said.
He said that two companies were set to join INDRA's program,
but declined to identify them. (rei)