APP creditors say dismayed with talks

APP creditors say dismayed with talks

Creditors of troubled Asia Pulp & Paper Co on Thursday called on
the Indonesian-controlled group to show more commitment to
restructuring its massive US$13 billion of debt, in a rare public
statement on the state of negotiations.

In a short statement sent to the media, the creditors said
they were dismayed at the pace of progress in their private
negotiations with the Indonesian conglomerate.

"Particularly disappointing is that APP has apparently not yet
committed itself to certain fundamental principles that the
steering committee has repeatedly put forward," they said.

Singapore-headquartered APP, the largest pulp and paper group
in Asia outside Japan, called a debt moratorium in March 2001 as
its operations tottered under the weight of a liquidity crunch,
falling pulp and paper prices and ratings downgrades.

The statement was issued by the Creditors' Combined Steering
Committee, which had been tight-lipped on ongoing talks.

The committee gave APP a restructuring plan on May 2 that
outlined a set of principles, which included a substantial
contribution by the controlling shareholders to the restructuring
exercise, debt-to-equity conversion, adoption of a cash sweep and
cash waterfall for the benefit of creditors.

APP simply indicated it accepted four restructuring
principles: differentiating debt into core and non-core debt;
restrictions on new debt; a monitoring program and a debt buy-
back program. -- Reuters