Creditors to decide Comexindo fate soon
JAKARTA (JP): Foreign and local creditors of PT Tirtamas Comexindo will meet soon to decide the fate of the heavily indebted general trading company.
Jamaslin Purba from Hotman Paris & Partners law firm, which represents Tirtamas Comexindo, said here on Thursday the creditors would vote on March 13 whether to approve the company's debt restructuring proposal.
If the majority of creditors reject the proposal to restructure the company's US$400 million debt, the company will be declared bankrupt and will face liquidation.
"We distributed the preliminary debt restructuring proposal to all the creditors early this week and hope they view it positively," said Jamaslin.
The Indonesian Bank Restructuring Agency -- representing the now defunct Bank Tamara -- filed a bankruptcy suit against Tirtamas Comexindo in December last year for its failure to repay Rp 38 billion ($5.2 million) in matured loans to the closed bank.
The courts then granted Tirtamas Comexindo a suspension of payment -- known as a PKPU -- giving the company time to negotiate a debt restructuring agreement with its creditors.
Tirtamas Comexindo is committed to repaying its debts and will use all the proceeds from its collected receivables to repay them, Jamaslin said.
In the 12-page preliminary debt restructuring proposal, the company said its financial difficulties resulted from the country's economic crisis rather than mismanagement.
The company attributed its deteriorating balance sheet mainly to fluctuations in the rupiah-dollar exchange rate and high interest rates.
"Besides having to pay between 40 percent and 70 percent of interest payments per annum, the company had to convert a considerable amount of U.S. dollar debt into rupiah at exchange rates then ranging from 10,500 to 17,000," the proposal said.
According to the Tirtamas Comexindo balance sheet used as the basis for the debt restructuring proposal, the company had a total debt of $400 million as of December 1999.
The company's total assets stood at $234 million, of which $121 million was in the form of account receivables.
Of this $121 million, the largest part was owed by Singapore- based Indocemex Fibres Pte. Ltd. (ICF), whose debts to Tirtamas Comexindo stood at $54.7 million.
ICF was declared bankrupt by the courts in Singapore in late 1999.
"Tirtamas Comexindo has tried to collect from ICF, but it did not receive satisfactory results. It then got even worse when ICF was declared bankrupt in late 1999," according to the document.
Tirtamas Comexindo is part of the Tirtamas Group owned by businessman Hashim S. Djojohadikusumo.(udi)