BDF debt restructuring plan approved

BDF debt restructuring plan approved

JAKARTA (JP): Publicly listed PT BBL Dharmala Finance (BDF)
announced on Thursday its debt restructuring proposal received
initial approval from the negotiation team representing the
company's creditors.

"The creditors' debt restructuring steering committee has
approved our restructuring proposal," a BDF executive said after
the company's annual shareholders meeting.

Company director Sim Idrus Munandar said the next step was to
gain final approval from all of its creditors for its proposal to
restructure its US$141 million debt.

The steering committee consists of five creditors who
represent some 15 local and foreign creditors in the debt
settlement negotiations, BDF corporate secretary Indrawati
Gunawan said.

The five creditors on the steering committee include the
International Finance Corporation, which is the World Bank's
private investment institution, the Commonwealth Development
Corporation and Dutch financial institution FMO, Indrawati said.

"The approval from the creditors means they still believe in
the recovery of our company," Indrawati said.

The financial crisis, which hit Indonesia in August 1997, has
affected most of the country's business sectors, particularly
after the government raised interest rates to as high as 70
percent to cope with spiraling inflation.

Indrawati said about 65 percent of BDF's leasing facilities
were given to small and medium-size companies.

She said a number of these companies could not service their
debt, so their financed machinery and equipment, which also
served as collateral, had to be repossessed by BDF for resale.

"We need the funds from the resale of this machinery to
service our own debt," Indrawati said.

The company provided Rp 4 billion in new financing in 1998
down from Rp 589 billion the previous year, she said.

BDF suffered a Rp 247 billion net loss in 1998, compared to a
Rp 145 billion net loss the previous year due to increased
foreign exchange losses resulting from the company's U.S. dollar
debt exposure.

The company's equity entered the red at minus Rp 245 billion
at the end of 1998, from Rp 2.1 billion the previous year.(udi)