Bukaka gets 75% discount on foreign debt payment: Imron

JAKARTA (JP): Publicly listed engineering and construction design firm PT Bukaka Teknik Utama said that its creditors had agreed to provide a "haircut" or discount of up to 75 percent on its foreign debt payment.

Imron Zubaidy, the vice president of Bukaka said that with the haircut, the company would pay only 25 percent of its total foreign debts, worth US$142 million (around Rp 1.40 trillion), owed to 39 foreign banks and other international institutions.

"With the agreement, Bukaka is required to pay only 25 U.S. cents for every dollar of its foreign debts," Imron was quoted as saying by Antara on Friday.

Imron said Malaysia's Golden Tower Company had signed a memorandum of understanding (MOU) to take over Bukaka's obligations to the overseas financial institutions.

If the Malaysian went ahead with the deal, it would spend less than $35 million to settle all of Bukaka's foreign debts, Imron said.

He acknowledged the Malaysian company still awaited an improvement in the country's political situation before entering with more detailed agreements.

According to Imron, the two companies had yet to decide whether the Malaysian company's capital injection would be converted into assets or equity.

Aside from its foreign exchange debts, the company also had debts worth Rp 71 billion owed to the Indonesian Bank Restructuring Agency (IBRA).

Imron said the IBRA had in principle agreed to reschedule the company's debt to between eight and 10 years.

"We hope the restructuring plan can be completed by the end of this year," Imron said.

After the settlement of all debts, the company planned to focus its operations on oil and gas, and telecommunications sectors, Imron said.

Bukaka Teknik Utama, which is partly owned by PT Bukaka Investindo, suffered a massive loss of Rp 700 billion last year, down steeply from Rp 14.5 billion in net profit in the previous year. The massive loss resulted mainly from swollen interest payment on its foreign debts, following the massive depreciation of the rupiah against the U.S. dollar last year. (03)