Govt, Marubeni to split Chandra Asri 80%:20%
Govt, Marubeni to split Chandra Asri 80%:20%
JAKARTA (Dow Jones): After long and tedious negotiations, the
Indonesian government and Japan's Marubeni Corp. (J.MRB) have
agreed in principle to split PT Chandra Asri Petrochemical
Center's equity 80 percent: 20 percent, a government official
said on Tuesday.
The split is part of the solution to restructure the company's
debt totaling around US$1.05 billion.
Dipo Alam, a deputy of the coordinating minister for economy,
finance and industry, said the government will own 80 percent of
Chandra Asri and Marubeni the remaining 20 percent.
Dipo added that as the government and Marubeni have agreed to
convert Chandra Asri's debt into equity, the three original
shareholders of the company will no longer own any stake.
"I think they should accept the fact that their ownership (in
Chandra Asri) will be zero," Dipo said.
The three local businessmen, Prayogo Pangestu, Hendri Pribadi
and former President Soeharto's middle son Bambang Trihatmodjo
were the original shareholders of the nation's largest olefin
producer.
The Indonesian Bank Restructuring Agency ended up as the
creditor of Chandra Asri after domestic banks transferred their
non-performing loans, including the ones provided to Chandra
Asri, to the bank agency.
Marubeni is the main guarantor of the $723 million of loan
provided by Japanese financial institutions.
Earlier, the government proposed to split Chandra Asri's
equity equally with Marubeni. The Japanese company, however,
insisted to get only a minority stake although the loans it
guarantees represent almost 69 percent of Chandra Asri's $1.05
billion debt.
By agreeing to obtain a higher stake in Chandra Asri, the
government may have to pay the company's remaining debt to
Japanese lenders.
"This thing is being discussed," Dipo said when asked whether
the government will have to pay the remaining debt to Japanese
lenders.
He added that Japan Bank For International Cooperation has
pledged to help provide a loan to Chandra Asri to revamp its
operation.
Chandra Asri plant is located in Cilegon, West Java and
produces ethylene, polyethylene, and propylene -- the base
materials for plastic.
The plant was built in the early 1990s and was given import
tariff protection by Soeharto's government.