APP settles row over machines

APP settles row over machines

SINGAPORE (Dow Jones): Asia Pulp & Paper Co. Ltd. said
Saturday it had settled disputes arising from proposals to buy
two paper manufacturing machines from Beloit Corp., a subsidiary
of Harnischfeger Industries Inc.

Under the settlement, APP said it would "acquire certain
equipment, components and spare parts produced or acquired in
connection with the paper machines, and Beloit will be paid
US$135 million."

Indah Kiat, a unit of APP, would pay an initial US$25 million,
with the remaining $110 million to be paid by a three-year Indah
Kiat 15 percent fixed-interest note to be guaranteed by APP, the
company said.

As part of the settlement, Beloit would retain a US$46 million
advance, and a US$59 million promissory note given to Beloit by
APP and four letters of credit would be canceled.

The dispute, which dates back to 1998, involves payment terms
for the paper machines. Harnischfeger had asserted that APP was
in default of payments for the machines, while APP said Beloit
Asia had breached its financing obligations under the purchase
contracts.