APP faces slew of S'pore court actions
APP faces slew of S'pore court actions
SINGAPORE (Reuters): Debt-ridden Asia Pulp and Paper (APP) and several units face eight lawsuits by ABN Amro NV, Credit Lyonnais and others for tens of million of dollars in Singapore courts in the next few weeks.
While the amounts are relatively small compared with the nearly US$11 billion in debt the company carries, the legal actions signal creditors may be losing patience and taking a tougher line with APP, whose assets are concentrated in Indonesia but include operations in China and India.
Court documents show New York-listed, Singapore-headquartered APP faced its first court hearing on Monday in a suit filed by Credit Lyonnais, but the case was adjourned to March 26.
A January 18 writ filed by Credit Lyonnais states the group's unit APP BVI owes the bank $2.2 million from an April 1997 swap and foreign exchange agreement and had not paid "despite repeated assurances" from APP and APP BVI.
On Monday, Fibre Source International Corp filed a writ for $1.53 million on claims related to credit facilities, overdraft and guarantees, court documents show.
The latest writ followed others filed last week by ABN AMRO and Avebe (Far East) Pte Ltd.
Dutch bank ABN AMRO is suing APP and three of its Indonesian subsidiaries PT Indah Kiat Pulp & Paper, PT Pabrik Kertas Tjiwi Kimia and unlisted PT Pindo Deli Pulp & Paper for the recovery of $31 million.
APP officials were not immediately available for comment on the suits.
APP, under heavy pressure to restructure a huge portion of its $11 billion debt, has also been summoned for a pre-trial conference on March 21 on a writ filed by Hong Kong-based Bank of East Asia.
APP recently said it planned to step up the disposal of non- core assets and had appointed Credit Suisse First Boston to assist it in dealing with its huge debt.
It also planned to accelerate its non-core asset divestments and has retained JP Morgan to advise on that.
Some analysts have said a restructuring of the whole group is inevitable due to liquidity problems.
They estimated it has almost $2 billion in notes, coupon payments and bank loans falling due this year.
APP is controlled by the Sinar Mas Group, Indonesia's second largest conglomerate, which is owned by the Widjaja family.
APP also has businesses in property, finance, plantations, and food making. But the major cash generator is the pulp and paper operations, the largest in Asia outside Japan.
APP's American Depositary Receipts, which closed at 23 U.S. cents last Friday, face delisting because they have traded below a mandated minimum of $1 for more than 30 days.