1,800 companies report foreign debts to BI

JAKARTA (JP): About 1,800 local companies have reported their foreign debts to Bank Indonesia, the central bank, chairman of the private offshore debt team Radius Prawiro said.

Radius said the value of debts reported by the companies had reached a total of between US$63 billion and $64 billion.

By Thursday, 1,000 private companies had reported foreign debts worth $58 billion to the central bank, Radius was quoted as saying by Antara on Friday night.

He said companies had rushed to report their foreign debt as the April 30 deadline for doing so approached.

Bank Indonesia estimated the country's foreign debts totaled $67.7 billion early last month, excluding $12.5 billion owed by state companies.

President Soeharto, in a decree dated April 8, instructed the country's private companies to report the extent of their foreign debt to Bank Indonesia by April 30. The statutory reporting requirements include the amount of principal debt, loan requirements, the repayment period, interest rates, lending cost, use of credit and the names of creditors.

The decree was made as part of efforts to solve the country's corporate debt problem, identified as one of the major causes of the economic crisis which has plagued the country over the past ten months.

Radius said the government would soon form the Indonesian Debt Restructuring Agency (INDRA). The new institution will be based on a similar Mexican institution known as Ficorca.

Mexico set up Ficorca in the early 1980s to solve its corporate debt problem. Under the Ficorca program, companies were allowed to repay foreign debt in pesos to Ficorca, which then repaid foreign creditors in dollars. By doing so, the Mexican government did not technically assume responsibility for private sector loans, but bore the foreign exchange losses.

Radius said INDRA would differ from Ficorca but did not reveal in what way.

Radius' team held talks with international creditor banks in New York last month and are scheduled to resume talks in Tokyo on May 7-10.

Banking analyst I Nyoman Moena supported the government regulation which obliges companies to report foreign debts, but he called on the government not to divulge the names and details of companies to the public.

"The government will not benefit from revealing debtors names and would taint the images of many of the companies by doing so," Nyoman said.

He noted that companies had turned to foreign creditors because local banks set higher interest rates than foreign banks.

"Furthermore, not all companies which have reported their debt are insolvent or bankrupt because they still have a period of grace before repayments become due," he said.

In a related development, publicly-listed leasing company PT Sinar Mas Multiartha announced on Saturday that its dollar- denominated debt was $37 million and its rupiah debt Rp 27 billion as of April 31.

The company said its creditors included PT Indonesia Dai-Ichi Kangyo Bank, BII-CIB, Fuji Bank of Singapore, Commerzbank of Singapore, Sanwa Bank of Singapore, Sanwa Indonesia Bank and Fuji Bank International Indonesia.

Some loans have been settled, the company said in a statement.

The company said that Rp 23 million of the Rp 27 billion loan provided by BII-CIB was repaid on April 13 and $20 million of the dollar-denominated loans issued by Fuji Bank of Singapore was repaid on April 24.

The company added that it had recently taken out a new loan of $7 million. (jsk)