Forum angered by debt restructuring
Forum angered by debt restructuring
JAKARTA (JP): The Communication Forum of Borrowers complained
on Friday over the slowness of the debt restructuring program
executed by the Indonesian Bank Restructuring Agency (IBRA).
Forum chairman BK. Hadisoebroto said the borrowers were
disadvantaged because the agency was not promoting a beneficial
debt restructuring process.
"It is a shame that only 63 companies of 1,600 under IBRA have
joined the agency's restructuring program," he said.
The forum currently comprises 96 corporate borrowers which owe
a total of about Rp 30 trillion to IBRA.
They are part of the group of companies whose nonperforming
debts were transferred to IBRA as part of the government-
sponsored bank restructuring program. The agency has so far taken
over about Rp 230 trillion in bad debts from closed, nationalized
and state banks.
Hadisoebroto accused IBRA of failing to create a fair process
in the restructuring of the borrowers' debts. He said the agency
only allowed limited involvement of the borrower in the
preparation of the business plan to be used as the basis of a
debt restructuring program.
"What should be done is that we prepare our own business plan
based on a self-assessment, which would then be properly
evaluated and agreed upon by IBRA if everything in the business
plan generally fits normal requirements."
He said differences in appraising the business plans often
resulted in a delay in debt restructuring talks.
"And many of the borrowers did not even have a chance to go
through the above process, but instead were forced to close down
operations because of IBRA's mistreatment."
He said the borrowers lost all hope of restructuring their
debts when the names of their companies were published in the
media and labeled "problem" borrowers.
"Many of us have been unable to continue our businesses since
then. We lost relationships with all our banks that were helping
us finance our exports."
Hadisoebroto said the announcement hit the companies when they
were at their most vulnerable.
"How can we start debt restructuring negotiations under such
conditions?"
Many of the borrowers are in the real sector, he added.
"It is tied up with the fact that most IBRA officials lack the
knowledge, experience and skill of the real sector business."
He said borrowers experienced difficulty in setting up
meetings with IBRA officials.
He claimed that letters requesting a meeting were sent to
IBRA's office on at least three occasions, but there was no
response.
The forum said it would report its complaints to the House of
Representatives and the International Review Committee, IBRA's
supervisory board.
IBRA's public relations officer Franklin Richard said the
borrowers were exaggerating their grievances.
"Their claims are simply out of proportion," Franklin told The
Jakarta Post.
He said every borrower's problems were unique, necessitating
individual debt plans.
"It is impossible to generalize about the problems of all the
borrowers."
IBRA's team also must trace and compile data on each
borrower's creditors, and data compilation process could be
lengthy due to the different creditors.
Franklin said the fact that IBRA completed debt restructuring
of 63 companies in a relatively short time was an achievement.
He said the document transfer of all the 1,600 borrowers to
IBRA was only completed in July.
"From July, we have had less than a year. Take for comparison
PT Astra International, which completed a debt restructuring deal
in 18 months' time," he said of the major automaker.
Franklin also said IBRA retained continual consultation with
about 40 financial consultants, who possessed a wide range of
real sector business expertise, in negotiating debt restructuring
with the borrowers. (udi)