Astra hopes to reach debt agreement later this month
JAKARTA (JP): PT Astra International said on Monday evening that it hoped to clinch a deal with its creditors by end of April to restructure its US$1 billion debt.
Astra president Rini M.S. Soewandi told journalists here that the creditors committee could accept the company's final proposal on debt restructuring.
"The creditors committee has been comfortable with our final proposal. So, they can accept it. They realize that Astra needs more time to repay all of its debt," Rini said.
Rini and five other Astra executives met creditors in Singapore earlier on Monday to present final details of the proposed debt restructuring.
Astra's creditors committee includes the Industrial Bank of Japan, Sanwa Bank, Dai-Chi Kangyo Bank, Fuji Bank, Bank Paribas, ABN-Amro and Bank Negara Indonesia. They account for some 20 percent of Astra's outstanding debt.
Rini said she was very hopeful that bank-creditors and holders of bonds issued by Astra would approve the company's full plan.
She said Astra debt restructuring executives would travel to Singapore, Hong Kong and Tokyo later this week to gather supports from creditors over the company's debt restructuring plan.
Bank creditors, which account for 65 percent of Astra's current debt, must have present their vote on the company's final proposal by April 28. And bondholders must vote by April 29. Late voters from bondholders would be tolerated until May 13.
"So, we will have a full result of the voting by May 15," Rini said.
Originally, Astra aimed to gain creditor approval by April 21. Rini said the dates were moved back the end of April to make it possible to complete legal and other documentation for the plan.
Under the restructuring plan, Astra's debts are divided into three tranches that will be fully repaid in three years, 6.5 years and 7.5 years respectively.
The first tranche, which has three-year maturity, consists of $200 million and Rp 189.9 billion (US$21.6 million) loans or bonds, with two year grace period of principal payment. Interest payment resumes after the deal is signed.
The dollar loans carry three-month Singapore Inter-Bank Offered Rates (SIBOR) plus 1 to 2 percent margin, while the rate for the rupiah debt uses three-month published local reference rate (of two state and two private banks) plus a margin, with a maximum rate of 35 percent per annum.
The second tranche, with 6.5 maturity, comprises of $705.4 million and Rp 701.7 billion loans or bonds, with three-year grace period on principal payment.
The dollar denominated debt under the second tranche has three-month SIBOR rate plus a margin, ranging from 1 to 5 percent. The rupiah debt has three-month local reference rate plus a margin.
The third tranche, with 7.5-year maturity, consists of $100 million and Rp 99.4 billion loans or bonds, with warrants. The dollar debt carry annual interest rate of 6.5 percent, paid at the maturity date, and the rupiah debt has annual rate of 15 percent, also paid at maturity date.
Astra plans to issue warrants that will convert into shares amounting to 10 percent of the company's issued share capital.
"We will tender the third tranche first before proceeding with the first and second. So, all creditors must bid for the third tranche when they vote for our debt restructuring proposal," Rini said.
If bids exceeded the allocated amount, Rini said, Astra would make proportional allocations. But when bids were below target, Astra would spread the remaining to other creditors fairly.
Rini maintained that the debt-restructuring plan would not require creditors to write off their debt, and she assured that creditors would receive their funds back in 7.5 years. (rid)