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