Economists support new L/C facility for Texmaco
Economists support new L/C facility for Texmaco
JAKARTA (JP): Economists supported on Friday the Rp 720
billion (US$96 million) credit facility extended by state Bank
Negara Indonesia (BNI) to giant textile producer Texmaco Group
despite the latter's huge nonperforming loans.
Economist Sri Mulyani of the University of Indonesia and
Sri Adiningsih of Gadjah Mada University supported the fresh
facility, saying it would revitalize Texmaco's textile business
which employs a huge workforce.
"I don't see a problem here since the government partly owns
Texmaco," Mulyani said on the sidelines of a seminar on the
economy organized by the Indonesian Democratic Party of Struggle
(PDI Perjuangan).
The Indonesian Bank Restructuring Agency (IBRA) took over last
Monday BNI's nonperforming loans, including some Rp 9.6 trillion
owed by the Texmaco Group, as part of BNI's recapitalization
program.
According to Kontan weekly, on the following day BNI provided
Texmaco with a Rp 720 billion L/C facility, which IBRA
guaranteed.
The weekly said IBRA agreed to guarantee Texmaco's new L/C
facility as the company had no working capital left to run its
business.
The six-month credit facility will be used to import raw
material for Texmaco's production, which is vital to
restructuring its debts, the weekly quoted IBRA's deputy chairman
for assets management credit Eko Budianto as saying.
While voicing support for the L/C facility, Mulyani called on
IBRA to place its people at Texmaco to control the use of the
facility.
Adiningsih said the government could not ignore the importance
of Texmaco given the large number of its workers.
But, she said, the government should keep in mind that Texmaco
is a big debtor and the L/C provision should be transparent.
She said BNI should have waited until Texmaco's debt
restructuring program was completed before it was provided with
fresh credit.
"In the end this may burden BNI's recapitalization program,"
she said.
Legislator Sukowaluyo Mintorahardjo approved of the new L/C
facility provided it was aimed at sustaining Texmaco's business.
"This is a new Texmaco here, in which the government has a
stake," Suko said.
Sukowaluyo, who is also head of House of Representatives
Commission IX for financial affairs, said the House would not
question Texmaco over the new facility unless the company used it
to repay its debts to creditors.
Late last year, Texmaco was widely criticized for obtaining
$754 million plus Rp 1.9 trillion mostly in preshipment export
facilities between November 1997 and February 1998 from Bank
Indonesia (the central bank) through BNI at a time when the
rupiah was under enormous pressure.
Critics said Texmaco had used its ties to Soeharto to twist
central bank rulings and gain access to preshipment trade
facilities from Bank Indonesia.(bkm)