Bank syndicate loans Rp 400b to Indosiar

Bank syndicate loans Rp 400b to Indosiar

JAKARTA (JP): A syndicate of local banks led by publicly
listed Bank Danamon agreed on Friday to provide a loan worth Rp
400 billion (US$35.7 million) to publicly listed television
company PT Indosiar Visual Mandiri.

Bank Danamon president Arwin Rasyid said that under the
agreement, Indosiar will use the funds to refinance its existing
loan to PT Holdiko Perkasa, a holding company managing the Salim
Group's assets, currently under the control of the Indonesian
Bank Restructuring Agency (IBRA).

"We are optimistic that Indosiar will be able to repay the
syndicated loan due to the company's good financial performance,"
he said.

He added that the country's growing advertising expenditure
will also enable the TV station to achieve better results this
year as well as in coming years.

According to the Indonesian Advertising Agency Association,
total advertising expenditure will increase to Rp 9.1 trillion
this year from Rp 6.9 trillion in 2000.

It also said that about 62 percent of this year's total
spending on advertising would go to TV stations.

Arwin said Indosiar had also pledged assets worth about 125
percent of the loan or about Rp 500 billion as collateral.

He said that Bank Prima Express is the only member of the
syndication at present but he hoped other banks would follow
suit.

Arwin said Bank Danamon will allocate Rp 350 billion for the
loan, while Bank Prima Express will provide the remaining Rp 50
billion.

"We will disburse the loan on June 26," he told reporters,
after signing the agreement."The loan will mature in June 2005."

Arwin said Bank Danamon will reduce its share in the
syndicated loan to about Rp 100 billion by selling some of the
credit to other local and overseas banks.

Among the potential buyers are Bank Niaga, Lippo Bank, Bank
Universal, HSBC and ABN Amro Bank, he said.

"We hope to complete the plan in September," he added.

The loan, with a maturity of four years, will be floated about
four percentage points above the average deposit rates, he said.

Dana Sutantio, the director of IBRA's asset management and
investment, said that the syndicated loan will enable Indosiar to
repay its debts to Holdiko with a 100 percent recovery rate.

"It is the first time during the restructuring program...we
hope it will trigger other debtors to do the same thing," he
said.

Indosiar's debt repayment will help IBRA fulfill its duty to
provide Rp 27.9 trillion in cash to the government this year, he
said.

According to him, Indosiar will repay all its debts to Holdiko
within the next two weeks.

Indosiar is one of over 100 companies transferred by the Salim
Group to Holdiko as part of the business group's debt settlement
to the government. To date, Holdiko controls about 57 percent of
Indosiar's shares.(05)