Creditors approve Intraco debt restructuring program

JAKARTA (JP): PT Intraco Penta won approval from its 14 foreign and local creditors on Monday to restructure its US$44.18 million debt.

Finance director of the publicly listed heavy machinery company Petrus Halim, said under the debt restructuring agreement, creditors would be offered either a five-year rescheduling of the debt, including a two-year grace period, or a minimum 60 percent debt reduction.

He said under the second option the company would pay the debt in cash.

"The debt restructuring agreement is meaningful to the company, because it gives a two-option scheme of debt settlement, which is good for both parties," he said after signing the agreement.

The restructuring agreement was signed with BHF-Bank Aktiengesellschaft and Bank Finconesia as the coordinating agent and security agent respectively.

Petrus said under the debt restructuring, a tender would be set up for creditors taking part in the debt reduction program.

He said creditors would win the tender by bidding the largest debt reduction to Intraco.

Intraco has set aside $5.2 million of company cash reserves to be used for debt repayment to the winning creditors, he said.

The minimum bidding rate is a 60 percent debt reduction.

Petrus said creditors who were unsuccessful in the tender would join the second option.

The debt rescheduling will bear an annual U.S. dollar interest rate of 12 percent on the five-year rescheduled term and be collateralized by the company's cash reserve, inventory and receivables.

"If both schemes in the debt restructuring proceed smoothly, Intraco will save an annual interest expense of at least Rp 12.5 billion (about $1.58 million), and reduce the company's risky exposure to the U.S. dollar," Petrus said.

The restructuring agreement was a signal of creditors' confidence in Intraco, he said.

"The 14 banks have performed a thorough one-year analysis on the company's general performance and prospects. The company at the end was deemed by those creditors to be feasible for debt restructuring." (udi)