Govt to finalize Chandra Asri debt today: Rini

JAKARTA (JP): The government plans to finalize the long- awaited debt restructuring of petrochemical giant PT Chandra Asri late on Thursday, Minister of Industry and Trade Rini Soewandi said on Wednesday.

Rini said that the decision was expected to be made at a meeting of the Financial Sector Policy Committee (FSPC), which groups several senior economic ministers.

"The government will finalize (the) Chandra Asri (restructuring) tomorrow afternoon in the FSPC meeting," she said after the opening of the 2001 Indonesian International Chemical Exhibition and Conference.

The government has been trying to hammer out a restructuring deal for Chandra Asri's massive debts for 19 months. The company owes around US$723 million to a foreign creditor consortium led by Japan's Marubeni Corp., and another $464 million to the Indonesian Bank Restructuring Agency (IBRA) which assumed the debt from ailing domestic banks.

Sources said that the Japanese government had been putting pressure on the Indonesian government to complete the restructuring deal immediately. Japan is the country's largest lender.

A restructuring deal hammered out in May by former coordinating minister for the economy Rizal Ramli was criticized by IBRA's oversight committee as being advantageous to the Japanese creditors, to the detriment of IBRA.

Under the restructuring scheme, the Japanese creditors would convert $100 million of their loans into 20 percent equity in Chandra Asri, while IBRA would convert $413 million of its $464 million loans into a 31 percent stake. The remaining 49 percent would be held by Chandra Asri founder Prajogo Pangestu.

While the Japanese creditors agreed to lower interest rates and extend the payment period, IBRA insisted that Marubeni convert more debt into equity.

Rini has said that the government believed the olefin producer was worth fighting for and therefore should be maintained, however, she explained that the company's debt restructuring scheme should not be a burden on the government.

"The key is how to minimize the government's bailout funds without jeopardizing the company's operation," she said.

Meanwhile, former IBRA consultant Amir Sambodo, who was also present at the exhibition, called on the government to help find a solution for Chandra Asri's debt problems.

"The government truly realizes the strategic role of the chemical industry," Amir said, as reported by Antara.

Amir said that the government should be more aggressive in asking the Japanese creditors to surrender more of Chandra Asri's debts with them in return for a higher stake in the company.

"I think Marubeni will be OK with this because Marubeni is not really new in this business," Amir added.

Meanwhile, the international chemical exhibition, which will run until September 7, has 46 exhibitors including several foreign companies.

The exhibition is organized by the Federation of Indonesian Chemical Manufactures in cooperation with PT Debindo Multi Adhiswati.(10)