Govt to finalize Chandra Asri debt today: Rini

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)