APP creditors set tougher debt workout terms: Source
APP creditors set tougher debt workout terms: Source
Soraya Permatasari, Reuters, Jakarta
Creditors of embattled Asia Pulp & Paper Co. Ltd., have
proposed tougher measures for the group's debt restructuring,
including a much shorter rescheduling period of five years, a
creditor source said on Tuesday.
In February, creditors rejected a preliminary restructuring
proposal presented by the group on its massive US$13 billion in
debt within hours of its proposal.
Creditor concerns included the group's plan to seek debt
extensions of up to 13 years and the expectation its founders, a
family controlled by ageing Indonesian-Chinese tycoon Eka Tjipta
Widjaja, would retain control.
The new measures would also include some form of debt-to-
equity conversion which would see the stake of the founding
Indonesian Widjaja family much reduced.
"With a much shorter rescheduling period of five years...plus
some form of debt-to-equity conversion...the Widjajas would see
their ownership reduced substantially," the source told Reuters.
A Wall Street Journal report quoted sources as saying
creditors also proposed an injection of forestry assets
controlled by the family into the troubled APP.
In a statement late on Monday APP said it would unveil its
response to creditors at a debt restructuring meeting in
Singapore on Wednesday after creditors outlined primary financial
terms for its restructuring plan.
APP, which froze repayment of principal and interest of its
hefty debt in March last year, did not provide details of the
creditors' proposal but said it was finding much more common
ground with them.
"APP is in the process of preparing a preliminary response
memorandum for consideration by its creditors," the statement
said.
"The outline and the response from APP form a solid basis for
further discussions," APP said.
APP also said it had appointed Eddy Pianto, a member firm of
Grant Thornton International, as auditors of its subsidiaries
Indah Kiat and Tjiwi Kimia, replacing Prasetio Utomo, the
Indonesian affiliate of Andersen.
Indah Kiat and Tjiwi Kimia have yet to submit their 2001
audited financial reports but have not been suspended from the
exchange despite warnings.
In a statement to the bourse on Monday, the companies said
they would only submit their audited 2001 results in July.
The firm said it had also appointed three people to the boards
of commissioners of the subsidiaries.
They are Mas Achmad Daniri, former director of the Jakarta
Stock Exchange, Ferdinand Sonneville, a former head of the
Indonesian real estate association, and Teddy Pawitra, a
supervisory board member of two Indonesian firms.
A Sinar Mas spokesman told Reuters the appointment of the
three new commissioners was to comply with a recent exchange
ruling which requires listed companies to have a so-called
independent commissioner to increase transparency.
"We also aim to place independent commissioners at other Sinar
Mas units," Yan Partawidjaja told Reuters.