Foreign banks loaned over Rp 72t to listed firms

Foreign banks loaned over Rp 72t to listed firms

JAKARTA (JP): Foreign bank finance channeled into the
country's publicly listed companies totaled more than Rp 72
trillion, including US$15.41 billion in foreign exchange as of
December, last year, according to the Indonesian Business Data
Center (PDBI).

PDBI said on Tuesday that the loans were channeled by 175
foreign banks and financial firms, including those operating in
the country.

"A total of 17 banks channeled more than Rp 1 trillion each,"
it added.

The loans were disbursed mostly when the rupiah was still at
Rp 2,450 to the U.S. dollar during the pre-crisis period.

PDBI said that Japanese banks contributed 28.2 percent to the
debts, followed by U.S. banks (23.3%), European banks (17.1%),
and others (31.4%).

It said that the foreign banks debt exposure represented 51.3
percent of the listed firm's total debts of Rp 141.2 trillion as
of December 1997.

It also said that debt writeoffs had been made by several bank
creditors since December.

The country's private sector overseas debts totaled $64
billion. Solution to the overseas debt problem is a key to the
strengthening and stabilizing of the rupiah in a sustainable way.

The government launched the Indonesian Debt Restructuring
Agency (INDRA) in early August to provide a framework for the
debt settlement and foreign currency at a locked-in exchange
rate.

In addition, the government also launched the so-called
Jakarta Initiative program, which eliminates regulatory obstacles
and provides tax incentives for corporate and debt restructuring
to promote out-of-court debt settlement.

In its latest letter of intent to the IMF, the government said
that the Jakarta Initiative task force had managed to attract 12
companies with a combined debt exposure in excess of $3 billion
to join the restructuring program.

A two-day gathering of hundreds of debtors and foreign
creditors is scheduled for November 2 in Jakarta to help in
encouraging debtors and creditors to negotiate and reschedule the
debts.

A government official said that the 12 companies which have
reached agreement with their creditors to reschedule the debts,
would share their negotiation experience with the other debtors.

Local debtors are seeking agreement from their creditors to
reduce the amount of their debts, in addition to the eight-year
debt rescheduling offered by the Frankfurt agreement in June
between representatives of both creditors and debtors.

The rescheduling agreement is a prerequisite for the debtors
to be eligible to enter INDRA. (rei)