Govt pays US$540m off foreign loans

Govt pays US$540m off foreign loans

JAKARTA (JP): The government last month paid US$540.46 million
of its high-interest debt to multilateral agencies ahead of
schedule and will soon amortize another $50.58 million, Minister
of Finance Mar'ie Muhammad said yesterday.

Speaking before the House of Representatives' plenary session,
Mar'ie said the amortized loans had annual interest rates of more
than 9 percent.

Mar'ie said $262.97 million of the early loan repayments went
to the World Bank and $277.58 million to the Asian Development
Bank.

The government is also paying off $50.58 million of its high-
interest loans from the French and the United States governments
and $156 million in export credits, he said.

"If these debt prepayments can be concluded, the government
will have prepaid a total $2.82 billion in foreign debt by the
end of the current fiscal year (1996/1997) next March," Mar'ie
said.

The amortization of debt will allow the government to save
$440 million in annual interest charges, he said.

Mar'ie explained yesterday how the debt would be amortized
when he presented five bills to the House for deliberation.

The bills are on local taxes and fees; on tax on the transfer
of land and buildings; on tax collection with distress warrants;
on tax courts; and on amendments to the 1994/1995 budget.

The minister did not elaborate on where the debt repayment
funds came from.

He said earlier this year that the government would continue
to repay its high-interest loans early using proceeds from the
sale of government shares in state-owned companies and from
budget surpluses.

Mar'ie yesterday dismissed speculation that the early
repayments were financed by proceeds from the sale of Bank BNI
shares, which were listed on the Jakarta stock exchange
yesterday.

"No, the funds were not derived from BNI because BNI will use
the fresh funds from its public offering to strengthen its
capital structure," Mar'ie told journalists after the plenary
session.

In the 1995/1996 fiscal year, the government paid $738.6
million of its high-interest debt early: $264.7 million went to
the World Bank and $473.9 million to the Asian Development Bank.

The government made these repayments after selling its shares
in domestic telecommunications provider PT Telkom on the New York
Stock Exchange and tin miner PT Tambang Timah on the London Stock
Exchange.

In the 1994/1995 fiscal year, the government amortized $782.9
million of its high-interest debt: $423.2 million to the World
Bank and $359.7 million to the Asian Development Bank.

Early debt repayments in the 1994/1995 fiscal year were
derived from the sale of government shares in international
telecommunications firm PT Indosat on the domestic bourses and
New York Stock Exchange in 1994. (rid)