FSPC approves debt restructuring for four companies

FSPC approves debt restructuring for four companies

JAKARTA (JP): The Financial Sector Policy Committee (FSPC) has
approved the debt restructuring of three companies proposed by
the Jakarta Initiative Task Force (JITF), and one company
proposed by the Indonesian Bank Restructuring Agency (IBRA).

The FSPC said in a statement issued on Friday that it had
approved the debt restructuring of the publicly listed
manufacturer of electrical and telecommunications cable PT Voksel
Electric, polyester maker PT Polysindo Eka Perkasa, and textile
producer PT Texmaco Jaya.

"These restructurings mediated by the JITF represent a
significant contribution to meeting the government's
restructuring targets for 2001," FSPC said.

The FSPC groups several senior economic ministers, and
oversees the country's major bank and corporate restructuring
program.

The JITF is a government-sponsored agency formed in 1998 to
help accelerate the debt restructuring of the country's private
sector by playing a mediator role.

According to last year's government letter of intent to the
International Monetary Fund, the task force is targeted to be
able to restructure a total of US$ 12 billion in corporate
overseas debt by April 2001. So far it has restructured more
than $9 billion debt.

The restructuring of the country's massive corporate overseas
debt is a key to help revive investors confidence in the economy.

FSPC said that Voksel would see its $8.6 million debt divided
into two tranches.

"The first tranche requires the rescheduling of (debt) payment
amounting to $4.3 million through 2008. The second tranche
requires the issuance of $4.3 million in convertible and straight
bonds," the committee said.

It also said that Texmaco Jaya and Polysindo Eka Perkasa --
units of the Texmaco group conglomerate -- would be merged and
their combined debts would be restructured via secured bonds and
debt-to-equity swap.

The FSPC did not state the amount of debt of the two units,
but recent reports said that the two companies had earlier agreed
in principle with secured creditors to restructure around $1.3
billion in debt.

"The debt restructuring mediated by the JITF is a workable
option for other creditors to consider," FSPC said.

Elsewhere, the committee said that the restructuring of some
$161.5 million debt owed by PT Permadani Khatulistiwa Nusantara
(PKN), which owns Jakarta's five-star Regent Hotel, to IBRA had
also been approved.

The committee said that the debt would be settled in three
tranches including cash payment, debt-to-equity arrangement, and
secured convertible bonds mechanism.

"This restructuring will give IBRA a 51 percent ownership of
the company," FSPC said, adding that exact terms and conditions
would be finalized soon.

The board of commissioners of PKN includes prominent figures
such as former minister Fahmi Idris, and businessmen Soegeng
Sarjadi and Bambang Hendrajatin.

PKN initially owed the debt to local banks, but after the debt
turned sour, IBRA took it over from the banks.

The agency is mandated to restructure and recover some Rp 260
trillion of bad debts transferred from ailing and domestic banks
which have been closed. (rei)