Creditors approve Astra debt restructuring program

JAKARTA (JP): Bank creditors and bondholders have approved Astra International's final debt restructuring program presented early this month, the company's president said on Thursday.

Rini M.S. Suwandi said the approval was received in reply forms sent to the bank creditors and voting results from the company's Rp 400 billion bondholders meeting held here on Thursday.

"The approval reflects the positive progress on Astra International's debt restructuring program that started since August 5, 1998, following the economic crisis in the region, including Indonesia, affecting the company's performance," she said after the meeting.

Rini said about 63.96 percent of the total loans, excluding the U.S. dollar bondholders, were consented to in the restructuring program as of Thursday.

Total bank creditors which have already given their approval reached 95.21 percent of Astra's total bank loans, or 57.58 percent from the company's total debts, while current total non- bank loan, including bondholders, reached 6.38 percent of the total company debt.

The Rp 400 billion (US$48 million) bondholders meeting in Jakarta was one of four bondholders' meetings held simultaneously on Thursday.

The company also held bondholders meeting for three types of U.S. dollar-denominated bonds totaling $500 million in Singapore. The three meetings were adjourned until May 14 because the obligatory 75 percent quorum for voting could not be achieved.

Rini said the company was not surprised by the failure to reach a quorum at the Singapore bondholders meeting citing that fact many bondholders were located in different countries.

"The failure to attain a quorum today was simply a technical matter because it involves tracking down the various bondholders and informing them of this meeting,"

"As of Thursday, the bonds were actively exchanging hands," Rini said.

She said under the existing procedure, the next bondholders meeting in Singapore will only need 25 percent of the bondholders to turn out to meet the quorum obligation.

Rini said the company was optimistic of meeting the quorum obligation in the next bondholders meeting because the number of bondholders who turned out at the meeting in Singapore reached more than 25 percent of the total bondholders.

The company is also optimistic the bondholders will approve the debt restructuring program after it sounded out the views of the bondholders who turned out for Thursday's meeting.

Rini said the company undertook all efforts to reach a unanimous agreement from all the bank creditors and bondholders with its debt restructuring program.

"However, if only a majority vote is achieved, Astra will submit the debt composition plan to the (local) commercial court for ratification which will bind all creditors," Rini said.

Astra, once one of Indonesia's most profitable and well- managed conglomerates, was saddled with financial problems following the fall of the rupiah's value in mid-1997.

Car sales, previously one of its core money earners, significantly dropped in 1998 and are expected to decline further in 1999 as Indonesia's economy remains stagnant.

The company finds it difficult to pay off its debt following the rupiah's sharp depreciation.

Total Astra loans under the debt restructuring program, including capitalized interest, are $1 billion and Rp 1 trillion, about 65 percent of which are in the form of bank loans, both in the U.S. dollar and rupiah, with the remaining in dollar and rupiah-denominated bonds. (jsk)