Chandra Asri deal not fair: Committee

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)