Ariawest finishes debt restructuring agreement
Ariawest finishes debt restructuring agreement
JAKARTA (JP): PT Ariawest International announced on Saturday
it had closed a debt restructuring deal with creditors and
vendors.
The company said the deal included the rescheduling of a
US$212 million project financing loan and $57 million owed to
vendors.
The deal also involved the injection of cash by Ariawest
shareholders, including Artimas Kencana Murni, which has a 52.2
percent stake in the company, MediaOne International BV, with a
35 percent and the Asian Infrastructure Fund with 12.5 percent,
the company said in a statement.
"We, the shareholders, have agreed to inject further equity,
given the assurance from the Ministry of Communication that the
joint-operations scheme (KSO) will quickly move to a joint-
venture corporation," Thomas E. Pardun of MediaOne International
BV said.
Restructuring of the privately owned fixed-line telephone
operator and constructor Ariawest involved 36 banks, six vendors
and three shareholders, he said.
Ariawest president John G. Vondras said the deal was finalized
in Jakarta, Singapore and the Netherlands, with CIBC World Market
as the financial advisor.
The company has been suffering from the sharp depreciation of
the rupiah since 1997, because its rupiah income is overburdened
by U.S. dollar debt financing.
"In the third quarter of 1997, the depreciation of the rupiah
and the ensuing economic crisis affected Ariawest's ability to
service debt obligations," he said.
Ariawest is one of five companies set to build and operate
telephone facilities under a joint-operation scheme with PT
Telkom.
Under the scheme, Ariawest works as the exclusive partner of
Telkom for services in West Java.
The company said it had exceeded its committed target of
29,000 phone lines, by constructing 324,000 new lines in West
Java. It currently operates a network with over 570,000 revenue-
producing lines and has a capacity to install 830,000 lines.
John Vondras, the president of the company, said in Bandung
recently that the company is committed to further strengthening
its investment in the telecommunications sector.
He said he hoped the government's plan to revise the joint-
operation scheme with Telkom would benefit all interested
parties, not only Telkom and its five partners, but also
customers. (udi/43)