Chandra Asri's debt restructuring signed
Chandra Asri's debt restructuring signed
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
has signed an agreement with Prajogo Pangestu on the
restructuring of PT Chandra Asri Petrochemical Center's debts,
allowing the tycoon to own 58.18 percent of the firm, according
to a recent document.
The document, a copy of which was made available to The
Jakarta Post on Sunday, said the debt restructuring agreement was
signed by the agency's head of credit settlement division,
Riswinandi, on behalf of IBRA chairman Edwin Gerungan and by
Prajogo, both as an individual shareholder and president of PT
Zillion Petrochemical Industries on Nov. 3.
Zillion is a new company formed by Prajogo to take over the
shares and debt obligations of Chandra Asri's local shareholders.
Prajogo's lawyer Denny Kailimang confirmed to the Post the
authenticity of the document.
He added that the Nov. 3 deal was not a memorandum of
understanding but a firm agreement.
The document was leaked to the media apparently in the wake of
a statement made by IBRA chairman Edwin on Friday that the
government had delayed taking a final decision in the debt
restructuring of the company.
Edwin said the Financial Sector Policy Committee (FSPC) had
delayed making a decision until next week due to the complexity
of the case.
It remains unclear as to whether the FSPC plans to review the
Nov. 3 debt restructuring agreement. One clause in the agreement
stipulates that it is subject to FSPC approval and IBRA is
obliged to secure its approval.
The agreement noted, however, that IBRA could not be accused
of violating the agreement if it failed to gain FSPC approval.
Under the Nov. 3 debt restructuring agreement, Prajogo and his
company Zillion will take over Chandra Asri's debt of US$626
million, which is owed to several local banks in exchange for a
58.18 percent stake in the company.
The remaining shares will be owned by IBRA (21.82 percent) and
Japanese firm Marubeni (20 percent).
Zillion will repay the debt by issuing rupiah-convertible
bonds worth about Rp 8.6 trillion based on a fixed rate of Rp
7,500 to the U.S dollar, which will mature in 15 years and carry
an interest rate of four percent a year.
Prajogo placed his shares in Zillion, Tripolyta and Pancapuri
as a guarantee to repay the debt.
In addition, Prajogo also put up his personal assets to cover
any shortfalls should the shares of the three companies not be
sufficient to cover the liabilities, according to the debt
restructuring agreement.
Under the agreement, IBRA has the right to place one director
and one commissioner in Zillion.
As a result of the agreement, Prajogo's former partners in
Chandra Asri, including Bambang Trihatmodjo, Henry Pribadi, Peter
Frans Gontha, Rosano Barack and Mohammad Tachril, will lose
ownership of the company.
The restructuring of Chandra Asri is one of the key points of
the country's restructuring program agreed upon by the government
with the International Monetary Fund.
Earlier in June, the government reached a debt-to-equity swap
memorandum of understanding with Marubeni, which allows the
Japanese firm to have 20 percent shares in Chandra Asri in
exchange for some $100 million debt.
Chandra Asri owes about $700 million to Marubeni. (jsk)