APP, creditors agree on payment period

APP, creditors agree on payment period

JAKARTA: Asia Pulp & Paper Co. (APP) and its creditors have
reached preliminary agreement on extending the payment period for
one third of the US$6.4 billion debt being negotiated this week,
the Singapore-based company with Indonesian and China operations
said.

APP can have up to 15 years to repay one portion of the debt,
amounting to $2.2 billion and classified as unsustainable. That
is longer than the previously agreed period of up to 10 years,
specified in a Sept. 2002 preliminary agreement.

The company and its lenders have been hammering out details
on how to restructure half of the $13 billion debt owed by APP's
biggest defaulter after 27 months of non-payment. A successful
agreement would bolster the government's efforts to lift
confidence in a country whose companies owe more than $60 billion
to overseas creditors.

Creditors, which include export credit agencies of Canada,
France, Germany, the U.S. and Japan and Japanese trading
companies, are to meet by June 9 to vote on the latest proposals.
-- Bloomberg