Bakrie & Brothers confident that 1999 will bring better fortunes
JAKARTA (JP): Publicly listed PT Bakrie & Brothers entered 1999 confident its fortunes will pick up after two difficult years.
Bakrie & Brothers president Irwan Sjarkawi said on Thursday the conglomerate expected to reach agreement by June at the latest with international creditors on restructuring its US$1.2 billion foreign debt.
"We hope to restructure all of our debt some time between April and June. After that, we can expect a kind of cocreation together with our creditors to nurture our business in the future," Irwan told The Jakarta Post.
Irwan said part of its offshore debt was repaid in early December through the sale of 4 million "class I" shares in Iridium LLC to American International Group Inc.
He said that although most creditors wanted to be repaid as soon as possible, it would be difficult to satisfy them all due to the sharp fall in the rupiah.
The rupiah has plunged from Rp 2,450 against the U.S. dollar in July 1997 to about Rp 8,000.
According to the conglomerate's data, about $400 million of the debt is in bonds and the remainder in syndicated loans. Almost half of the debt was hedged, minimizing the foreign exchange loss potential.
After debt restructuring, Bakrie hoped its businesses would proceed again normally in line with economic recovery in Indonesia and the rest of crisis-hit Asia.
"Now inflation is falling, and the market is starting to move. We hope 1999 will be much better for business, with less volatility of the rupiah-U.S. dollar exchange rate," Irwan said.
Irwan, who took over the presidency from Tanri Abeng in June, said he would continue to develop the current core businesses of infrastructure, plantations and telecommunications.
The only difference, he said, would be to shift the market from domestic to international to reduce the impact of uncertainties in the domestic market on its operations.
He said the enterprise last year raked in 60 percent of its consolidated revenue from the international market, compared to 50 percent in 1997.
"We will continue to focus on the international market. Not only will it reduce our risks on local uncertainties, it will also improve our real competitiveness among international corporations."
By improving its international competitiveness, Irwan said, Bakrie would be in the forefront when the planned free market comes into being in 2003.
Domestically, Irwan said, Bakrie & Brothers was also confident of gaining support from its stakeholders to expand its businesses.
He said Bakrie was unfazed by recent political developments because it was founded on hard work, and not corruption, collusion and nepotism.
Irwan said Bakrie & Brothers would therefore have no problem in its corporate endeavors regardless of the winner of the June general election.
"We face the future with confidence as our business is built together with our customers. We are dependent on our customers who are at home and abroad, not on any political decisions," he said. (rid)