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)