Govt speeds up repayment of high-interest debts
Govt speeds up repayment of high-interest debts
JAKARTA (JP): The government will use the US$799 million in
funds raised from the recent sales of its shares in Indosat
through the New York Stock Exchange (NYSE) to speed up the
repayment of its high-interest loans from the World Bank and the
Asian Development Bank, a minister says.
"The early repayment is intended to reduce the burden of the
state budget since most of the loans from the World Bank (WB) and
the Asian Development Bank (ADB) carry fixed interest rates of
above 11 percent per annum," Minister of Finance Mar'ie Muhammad
told the Budgetary Commission of the House of Representatives
here yesterday, the last day of their four-day hearing.
The minister explained that early repayment is focused on some
of the high-interest loans extended by the WB and ADB in the
period between 1981 and 1983.
The minister said that $426.05 million of the total funds from
the sales of Indosat shares are for early repayment of high-
interest loans from the WB and the remaining $365 million for
some of the Manila-based ADB's loans.
Indosat, the provider of international telecommunication
services, raised US$799 million from the sales of 25 percent of
its ordinary shares through the NYSE in October and around Rp 650
billion ($297 million) from the sales of another 10 percent of
its shares on the local capital market.
The shares sold through the NYSE were mainly government shares
while those sold at home mostly consisted of new shares.
Mar'ie said that proceeds from the sale of the new shares will
be used to strengthen Indosat's telecommunication facilities.
The government's outstanding debts fell by almost $3 billion
to $56.6 billion as of the end of September from $59.46 billion
at the end of June.
The government's outstanding borrowing as of the end of
September constituted $26.02 billion from Japan, $10.14 billion
from the WB, $4.36 billion from ADB, $3.11 billion from the
United States, $2.22 billion from France, $1.43 billion from the
Netherlands and $9.35 billion from other creditors. (hen)