1,800 companies report foreign debts to BI

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)