APP to sign restructuring deal

Asia Pulp & Paper Co. (APP) is expected to sign a long-awaited restructuring agreement with key creditors on Thursday, which would pave the way for the restructuring of its giant US$6.7 billion debt.

APP will sign a master restructuring agreement with export- credit agencies of 11 countries - including the U.S., Japan and several European nations - and the Indonesian Bank Restructuring Agency (IBRA), which is the company's largest creditor.

The agreement is the product of months of wrangling between creditors and APP, which stopped making payments on its total $13.9 billion debt over two years ago.

The company, which is based in Singapore but has operations in Indonesia and China, owes some $13.9 billion in debts to hundreds of foreign creditors ranging from the export credit agencies, to pension funds and individual bondholders. It has stopped making payments on the debts since two years ago. The debt of the Indonesian operations totaled $6.7 billion. -- JP