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)