Bambang prods major debtors to pay up
Bambang prods major debtors to pay up
JAKARTA (JP): Finance Minister Bambang Subianto met owners of
the 200 largest indebted companies including Mohammad Bob Hasan
and Aburizal Bakrie on Saturday in a final round of efforts to
push them to sign a loan recovery agreement.
Deputy chairman of the Indonesian Bank Restructuring Agency
(IBRA) Eko S. Budianto said the move was part of a series of
steps implemented to recover between Rp 60 trillion to Rp 70
trillion (US$8.75 billion) in non-performing loans (NPLs) owed by
the debtors to domestic banks.
He said that debtors were expected to sign a "letter of
commitment" on June 22.
He explained that the letter of commitment contains a 4-point
provision including an agreement to be fully transparent to allow
the agency to audit the real condition of the debtors and design
a debt restructuring program and an agreement to make divestments
in case debtors lack cash to make repayments.
"We want to encourage them to work fast because we have set
August 30 as the deadline before we take unpopular steps," he
told reporters following the closed door meeting.
Bambang wasn't able to be reached for comment.
Eko said the debtors must have already reached a final debt
restructuring agreement with the government by the deadline or
they would face litigation measures.
Eko dismissed rumors that the letter of commitment would bind
the debtors to hand over personal assets to repay debts.
"There's no way we can do that if the credit agreement doesn't
include personal assets as collateral," he pointed out.
"The debtors thought that we're going to confiscate personal
assets if they sign the letter of commitment. But we've
explained this to them and they understand," he said.
He said that two indebted companies, shipping group PT Humpuss
Intermoda and container operator PT Humpuss Peti Kemas,
immediately signed the letter of commitment after the meeting.
Humpuss is the holding company of Tomy Hutomo Mandala Putra,
the youngest son of Indonesia's former president Soeharto.
Eko said that debtors who declined to sign the letter of
commitment would risk having names published in newspapers.
IBRA announced early this month the names of the 200 most
indebted companies, which include those belonging to the cronies
and family of former president Soeharto.
Most of the large NPLs are believed to be owed by the debtors
to state banks.
The debt restructuring process has been very slow particularly
as most of the worst debtors are companies belonging to well-
connected businessmen.
Government officials had quietly admitted that IBRA was
finding difficulty in getting a real picture of the indebted
companies as the debtors declined to be transparent.
But after Saturday's meeting, the debtors claimed that they
would sign the letter of commitment.
"I think it's fair and just. We really welcome this positive
step so that we can have a way out (of the debt problem)," said
Mohammad Bob Hasan, a long time golfing partner of Soeharto.
Benny Soetrisno, president of textile maker PT Apac Inti
Corpora, concurred.
"And the meeting was a positive step as well. Debtors now
realize that IBRA is not a slaughterhouse," he said, referring to
IBRA's plans to liquidate indebted companies which fail to make
debt repayment.
Aburizal Bakrie, chairman of the Bakrie Group said the
government told the meeting that the focus was to restructure
indebted companies not to liquidate them to prevent further
layoffs.
"The government wants to solve (debtors) problems not make
them bankrupt," he said.
"So I think it is fair for the government to demand the
debtors to be open," he added.
But Aburizal, who's also chairman of the Indonesian Chamber of
Commerce and Industry, asked the government to delay the August
deadline as debtors would need a longer adjustment time to accept
the fact that they would become minority shareholders as a result
of a debt-to-equity swap restructuring option.
"They need more time to change their mentality," he pointed
out. (rei)