Chandra Asri deal not fair: Committee

JAKARTA (JP): The oversight committee of the Indonesian Bank Restructuring Agency (IBRA) said that the restructuring scheme of petrochemical firm PT Chandra Asri Petrochemical Center was advantageous to the firm's Japanese lenders but disadvantageous to IBRA.

Oversight committee chairman Mar'ie Muhammad said in a press conference that the committee had reviewed the restructuring schemes of IBRA's 32 debtors, of which four, including that of Chandra Asri, had been completed.

The committee published on Thursday the result of its review as demanded by the International Monetary Fund. It is soon expected to publish further review results.

The various debt restructuring schemes were approved by the previous members of the Financial Sector Policy Committee (FSPC), which groups several senior economic ministers.

The oversight committee said that the restructuring of Chandra Asri debts had been carried out without following the guidelines set by the FSPC itself.

Under the restructuring scheme, Japanese lenders, led by Marubeni Corp., would convert US$100 million of their $723 million loans into 20 percent equity in Chandra Asri, while IBRA would convert $413 million of its $464 million into a 31 percent stake, with the remaining 49 percent to be held by founder Prajogo Pangestu.

"IBRA would have maintained a sustainable loan of $263 million as compared with $50 million under the FSPC scheme," the oversight committee said.

It said that despite IBRA converting 89 percent of its debt and Japanese lenders converting 14 percent of theirs, Japanese ownership was diluted by only 3.8 percent from 23.8 percent.

It added that IBRA's recovery was possibly more likely from liquidating or selling the company than by maintaining Chandra Asri as a going concern.

"Looking at it from a purely commercial basis, the restructuring scheme is clearly disadvantageous to IBRA and advantageous to Marubeni," the committee said.(rbw)