Bahana proposes to repay 10% of debts

JAKARTA (JP): Financially troubled state-owned securities company PT Bahana Pembinaan Usaha Indonesia will propose paying off up to 10 percent of its US$300 million in debt during a meeting with its 27 creditors in Singapore on Monday.

The company said here over the weekend that the 10 percent figure was the most "realistic option".

"Such an option is the most realistic offer that can be made in the restructuring of the company's debts," company spokesman Yasser Arafat said.

The 10 percent debt repayment will be one of two options to be forwarded to the creditors, who will discuss the company's debt restructuring proposal during the Singapore meeting. The other option will be to liquidate the company.

Yasser said that if the liquidation measure was taken, the proceeds from the sale of the company's assets would be proportionately divided among all of the creditors, including the Indonesian Bank Restructuring Agency (IBRA).

According to the company, its total assets are valued at about Rp 1.1 trillion (about $100 million), as compared to its debts of $300 million.

But Yasser said it would be difficult to sell all of the assets.

Citing assessments by IBRA and financial auditor Arthur Andersen, Yasser said the company's assets were mostly poor in quality.

The company said it would appoint an independent auditor to revaluate the assets so creditors would have more reliable information.

The revaluation will be finished by June this year, it added.(03)