Companies under JITF get special treatment

Companies under JITF get special treatment

JAKARTA (JP): The Jakarta Stock Exchange (JSX) management has
agreed to exempt poorly performing companies from the existing
listing requirement if they are engaged in debt restructuring
talks with their respective creditors.

The agreement was signed here early this week with the Jakarta
Initiative Task Force (JITF), a special government agency
established in early 1999 to help facilitate debt-laden companies
in settling their debts.

Bacelius Ruru, the chairman of JITF, said many companies were
facing a delisting threat from the JSX due to a continued decline
in their financial performances.

"Under the MoU (Memorandum of Understanding) between JITF and
JSX, those companies are exempted from the existing listing
requirement for up to six months," he said, adding that the
exemption period was, however, extendible under special
circumstances.

Companies qualified for the special consideration are those
that are in active negotiations with their creditors under the
JITF mediation and are classified as "cooperative" by JITF,
according to Bacelius.

"Publicly listed companies are a valuable component in debt
restructuring negotiations and if they are delisted, this can
reduce the chances of reaching a successful restructuring
agreement," Bacelius added

The MoU between JITF and JSX would prevent the above from
happening, Bacelius said, adding that those companies would have
a better chance of reaching an agreement with their creditors if
their listing on the stock exchange was maintained.

JSX president Mas Achmad Daniri said the MoU served as one of
the strategic moves to help the publicly listed companies get out
of the economic crisis.

"This is one way to help them, while still upholding the
integrity and confidence of the market," he said adding that
debt-trapped companies labeled "uncooperative" by JITF would not
get the waiver.

At least 20 companies listed on the JSX have received a
delisting threat due to their deteriorating financial
performances. Most of them have defaulted on their debts with
local and foreign creditors. (udi)