BFC regrets bankruptcy suit

JAKARTA (JP): Bakrie Finance Corporation (BFC) said on Saturday that it regretted the bankruptcy petition filed by its Hong Kong-based creditors.

The company said in a statement that there were no parties which would benefit from the bankruptcy suit.

The bankruptcy suit would force BFC to halt other ongoing debt-restructuring negotiations with other creditors, the company said.

"BFC informed the Hong Kong creditors that it was having difficulty repaying its loan and later submitted a few schemes of debt-restructuring proposals, but they never approved any of the schemes," the company added.

The company said that debt-restructuring negotiations with the Hong Kong creditors went on between 1998 and mid-1999, but the outcome was not good.

BFC said it underwent business restructuring to survive the crisis, but the move did not yield good results due to the debt problem.

"Corporate reorganization has to be supported by the debt restructuring," it said.

Five Hong Kong-based banks, namely AB Capital Markets Ltd., Cho Hung Leasing & Finance Ltd., Hana Bank, Hanmi Leasing & Finance Ltd. and KEB Leasing and Finance Ltd., jointly filed the bankruptcy claim against BFC for failing to pay its matured debt.

BFC said that from the total US$21 million loan extended to the company in 1996 by the five banks, BFC already repaid $7 million.

BFC, the financial division of the Bakrie Group, acknowledged that the remaining $14 million of the total debt became due in early May this year. (udi)