Djajanti submits new debt repayment proposal to IBRA
JAKARTA (JP): Plantation and fishery concern Djajanti Group sent a new debt repayment proposal to the Indonesian Bank Restructuring Agency (IBRA) on Wednesday to avoid potential legal action by the agency.
The new proposal was made amid rumors that IBRA planned to file bankruptcy petitions against four of its largest debtors, including Djajanti, for being uncooperative. The other three companies were Nusamba Group, Gajah Tunggal Group and Tirtamas Group.
Company commissioner Effendi Sasrawijaja said the new debt repayment proposal reflected the company's readiness to cooperate with the agency, which manages Rp 220 trillion (US$25 billion) worth of bad debts transferred from domestic banks.
Djajanti, which is among the country's 21 largest obligors whose debts have been taken over by IBRA, has a total debt of about Rp 2.7 trillion.
IBRA has required that Djajanti pay Rp 270 billion up front in cash, or 10 percent of its debt, to show a cooperative attitude toward the agency. Otherwise, the agency would file a bankruptcy petition against the company.
Earlier, Djajanti told IBRA that it did not have such an amount of money, and instead proposed providing Rp 25 billion in the first cash payment to the agency and paying the rest in installments over three years.
Under the new proposal, Effendi said, Djajanti stipulated it was ready to provide Rp 50 billion in the first cash payment and pay the remaining Rp 130 billion debt in three years at the latest.
"We promise to pay the Rp 270 billion debt in a much shorter time if our operations run smoothly," Effendi said.
Djajanti, which has 70 percent of its plantation and fishery plant assets in Maluku and Irian Jaya, is now facing difficulties in its operations following the one-and-a-half-year-long religious violence in Maluku and the rising separatist movement in Irian Jaya.
The company said its plywood production in both areas had dropped as 80 percent of its workers had fled the areas to avoid violence.
Djajanti controls several forest concessions covering a total of 2.8 million hectares and operates eight fish processing plants in Maluku and Irian Jaya with a total of 50,000 workers.
Sources said head of the House of Representatives Commission IX for the state budget and finance Sukowaluyo Mintorahardjo reportedly sent a letter to IBRA, asking for the agency's understanding of the difficulties being experienced by the company in Maluku and Irian Jaya.
Djajanti borrowed Rp 930 billion from Bank Dagang Negara for one of its plantation units in 1994. Lured by the low interest rate of dollar loans, the company later converted the loan into dollars.
However, the loan soared to Rp 2.7 trillion amid the economic crisis sparked by the sharp depreciation of the rupiah against the dollar in 1997.
Effendi noted that some American financial companies were now eying Djajanti and hoping that IBRA filed a bankruptcy petition against the company and that the court would declare the company bankrupt so they could buy it at low price.
He refused, however, to name the companies.
"Djajanti is the only big national company in Irian Jaya. If the American firms take over the company, there won't be any big national enterprise left in the province and all the industries in the province will be controlled by foreigners," Effendi said.
"If all the industries in the province were controlled by foreigners, I am afraid the separatist movement in the province will get stronger," Effendi warned.
Aside from Djajanti, another big company operating in the province is gold and copper mining company PT Freeport Indonesia, controlled by American firm Freeport McMoRan Copper and Gold. (jsk)