APP units seek lower bond interest

APP units seek lower bond interest

JAKARTA: PT Pabrik Kertas Tjiwi Kimia and PT Pindo Deli Pulp & Paper Mills, two of four Asia Pulp & Paper Co.'s operating units in Indonesia, are seeking an agreement with their rupiah bondholders today for lower interest payments.

Tjiwi Kimia and Pindo plan to continue paying interest on a combined Rp 400 billion (US$43.5 million) of bonds, at 2 percentage points more than the three-month central bank bill rate, starting in October, Yan Partawidjaja, a spokesman from Asia Pulp's parent, the Sinar Mas group, said in Jakarta.

The new interest rate would be lower than the 17 percent paid previously to rupiah bondholders under a January 2002 agreement. Still, it is higher than what foreign creditors would receive under a debt-repayment plan proposed in 2003. -- Bloomberg