Cibinong, Polysindo to finalize debt plans

JAKARTA (JP): Cement producer PT Semen Cibinong and integrated textile company PT Polysindo Eka Perkasa are expected to finalize their debt restructuring programs by the end of this year, according to the Jakarta Initiative Task Force (JITF).

JITF chairman Barcelius Ruru said on Thursday that the two companies' combined debts totaling about $2 billion were part of the private debts which were restructured under the agency's assistance.

He said the agency's target this year was to help restructure between $8 billion to $10 billion in corporate foreign debt.

"The restructuring of these two companies' debts would bring us to our target for the year," Ruru was quoted by Antara as saying.

He said he is optimistic the target would be reached because as of July 2000, the total amount of the private debts restructured with the agency's assistance was $5.2 billion.

JITF was established by the government in early 1998 to help the restructuring process of the country's private debts. Companies which restructure their debts under the agency's facilitation receive a number of fiscal incentives such as a 30 percent tax discount on the debt reduction given by their creditors.

According to the World Bank, Indonesia's corporate debts including those owed by state-owned enterprises and small to medium-sized companies totaled $119.7 billion.

Ruru admitted that the weakening of the rupiah during the past few weeks has effected the restructuring of debts handled by JITF, but that it would not suspend negotiations.

The only effect to the fluctuating rupiah was that negotiations between creditors and debtors has become more heated, he said.

"We cannot delay restructuring talks even if the rupiah is fluctuating because it would cost a lot more money," he said. (tnt)