Govt, Marubeni reach deal on Chandra Asri's debt

Govt, Marubeni reach deal on Chandra Asri's debt

The Jakarta Post, Jakarta

The government and Japan's Marubeni Corp. have clinched a deal
on the restructuring of US$1.2 billion debt owed by petrochemical
firm Chandra Asri, according to a senior government official.

"The deal will be signed tomorrow (today)," secretary of the
Financial Sector Policy Committee Syafruddin Temenggung said on
Tuesday.

He said both parties had cleared the latest hurdles for the
deal, after the Japanese firm accepted the government's proposal
to incorporate three special points into the debt-restructuring
deal.

The government asked that the deal contain a clause
stipulating that any change in Chandra Asri's shareholder
composition would follow existing regulations, a non-default
clause that prohibits any parties from declaring Chandra Asri
bankrupt for failing to pay its debt, and a clause saying Chandra
Asri's excess cash flow should be distributed among shareholders
as dividends.

Chandra Asri owes some $730 million to a consortium of foreign
creditors led by Marubeni and another $464 million to the
Indonesian Bank Restructuring Agency (IBRA), which took over the
loans from ailing domestic banks.

Late last year, after long and tough negotiations, Marubeni
agreed to convert $147 million of the debt into a 24 percent
stake in Chandra Asri. Previously, the Japanese firm had only
agreed to take a 20 percent stake in the company.