Bhuwanatala ready to settle debts to IBRA

JAKARTA (JP): Publicly listed property company Bhuwanatala Indah Permai Tbk (BIP) is offering a debt-to-equity swap to settle its Rp 368 billion (about US$43 million) debt with the Indonesian Bank Restructuring Agency (IBRA).

The company's director, Cahyo Purnomo, said here on Thursday the swap was one of several debt settlement alternatives proposed to IBRA.

The other options, he said, included rescheduling the maturity of the company's debts to seven years and the issuance of convertible bonds to the agency.

He said IBRA was conducting a due diligence on the company's assets and performance before responding to the proposal.

"We need to extend the maturity of our debts to seven years to enable the company to maintain its cash flow," he said during a media conference.

Bhuwanatala, which owns and operates Hyatt Regency Hotel and Bandung Indah Plaza, office buildings and retail outlets, owes Rp 368 billion and $1.8 million to IBRA.

The agency took over the debts from several closed banks -- Bank Pelita, Bank Tiara and Bank Alfa -- and the recapitalized Bank Duta.

In addition, the company also owes $40 million in dollar- denominated loans to a syndicate of international banks led by Japan's Sumitomo Bank.

Regarding its debt to these international creditors, Cahyo said the company did not propose any debt rescheduling but asked the creditors to lower the interest rates on the loans to between 2 percent and 3 percent from between 5 percent and 6 percent.

"Sumitomo promised to consider our offering, but IBRA has not given a response since the agency is still doing a due diligence, which is supposed to be finished later this month," said the company's finance manager, Tri Haryati. (02)