Bakrie plays down concerns over its restructuring plan
Bakrie plays down concerns over its restructuring plan
JAKARTA (JP): Chairman of the well-diversified PT Bakrie &
Brothers Aburizal Bakrie played down on Monday concerns by the
U.S. Exim Bank over the transparency of the business group's
US$1.02 billion debt restructuring plan.
Aburizal said the U.S. bank's concerns would not affect the
debt restructuring program which in principal was approved by
most of its creditors.
"The Exim Bank concern was issued before the meeting took
place. And the bank didn't take a vote," he said on the sidelines
of a seminar on the economy.
Aburizal said the company had already reached an agreement in
principle with two-thirds of the creditors attending the April 20
informal meeting to restructure its debts through a debt-to-
equity swap scheme.
He said the meeting was attended by 69 percent of the
company's creditors, which means decisions were made by the
necessary quorum.
Aburizal said on Monday that a final agreement on the debt
restructuring plan was expected to be reached in August as
initially scheduled.
The U.S. Exim Bank issued a letter on April 9 to Bakrie's
creditors expressing concerns over the transparency of the
company's debt restructuring plan.
The bank demanded an "investigative accountant" to assist in
evaluating Bakrie's financial position.
"Bakrie & Brothers has been insufficiently cooperative in
disclosing information about its current and past business and
financial activities," the bank said.
Dow Jones reported that the bank "conservatively estimated"
Bakrie's debt plan would only yield lenders between "6 to 7 cents
on each dollar".
The Exim Bank is owed $75 million by PT Ratelindo, a
telecommunications unit of Bakrie & Brothers.
The Bakrie debt restructuring plan will be implemented through
a massive debt-to-equity swap that will result in five Bakrie
subsidiaries being placed into a holding company 80 percent owned
by the creditors. The lenders will also hold 30 percent in Bakrie
& Brothers' subsidiaries.
Exim Bank said the holding company arrangement might be
inadequate, as the Bakrie family itself would maintain
significant influence over many of its interests.
The holding company would hold only a minority equity interest
in most of Bakrie's operating subsidiaries, the bank said.
Bakrie is one of the few companies which has been progressing
in debt negotiations with foreign creditors.
Businessmen said debt restructuring agreements reached by
several private companies with their foreign creditors would be
sufficient to reassure foreign banks to resume lending activities
in the crisis-hit economy.
Indonesia has some $64 billion in private sector overseas
debts.
Other companies which have been progressing positively with
their debt restructuring process include state-owned fund
management firm PT Danareksa, conglomerate PT Astra
International, petrochemical firm PT Polysindo Eka Perkasa and PT
Mulia Industrindo. (rei)