BPIS wants to keep IPTN, Inti and Barata

BPIS wants to keep IPTN, Inti and Barata

JAKARTA (JP): PT Bahana Pakarya Industri Strategis (BPIS)
urged the government on Monday to convert nearly Rp 2.5 trillion
($294 million) of debts jointly owed by three of its subsidiaries
into equity participation to keep them in Indonesian hands.

BPIS, a holding company overseeing 10 state-owned companies in
strategic industries, said the Indonesian Bank Restructuring
Agency (IBRA) last month took over its three subsidiaries because
of their mountains of unpaid debts.

The three are aircraft manufacturer PT Industri Pesawat
Terbang Nusantara (IPTN), foundry and heavy industry PT Barata
Indonesia and telecommunications manufacturer PT Industri
Telekomunikasi (Inti). Together they owe Rp 1.26 trillion in
principal debts and another Rp 1.24 trillion in interest payment
arrears.

"We are asking IBRA to consider debt-equity swap arrangements
for these three companies in the same way that the agency has
offered some private companies," BPIS finance director Juniar
Chaidir told reporters.

BPIS President S. Paramajuda said the worst thing that could
happen to these three companies would be if the government sold
them to foreign "vultures" at rock bottom prices.

In spite of their financial conditions, these companies have
good assets and manpower resources, Paramajuda said.

The amount BPIS sought for debt-equity swap arrangements was
relatively small compared to the money being injected by IBRA to
bail out many private companies, he said.

The best option for the three companies, he added, would be
for them to go public, but this could only take place once the
companies' capital has been restructured.

Juniar said BPIS and the government were near an agreement in
resolving the debts of the three companies towards the end of
last year. Negotiations were restarted however after the election
of the new government of President Abdurrahman Wahid in October.
Then, in May, it was decided that IBRA should take over the three
companies.

She cautioned IBRA against choosing the wrong partners for the
three companies. "The basis of their selection should not be
determined solely on funding. They should be strategic partners."

BPIS, incorporated in 1998, is currently overhauling the
capital structures of all 10 companies under its charge. IPTN,
Barata and Inti are aspects of the holding company's long term
plan to create competitive companies of a global standard.

BPIS's other seven subsidiaries are PT Boma Bisma Indra
(industrial equipment), PT Dahana (explosives), PT Industri
Kereta Api (rolling stock), PT Krakatau Steel (steel and iron),
PT LEN Industri (professional electronics), PT PINDAD (weapons
and ammunition) and PT PAL Indonesia (shipbuilding).

Together, these 10 companies control Rp 15.5 trillion ($1.8
billion) in assets and employ 31,800 employees.

All 10 companies export some of their products and all but
IPTN ran profitable operations last year. Although their shares
are wholly owned by the government, none received further
government subsidies. (emb)