Gus Dur, Marubeni boss to decide Chandra Asri's fate

JAKARTA (JP): President Abdurrahman Wahid and the president of Japanese giant trading house Marubeni Corp. will soon meet here to discuss the fate of financially troubled petrochemical giant PT Chandra Asri Petrochemical Center, a senior minister said here on Saturday.

Coordinating Minister for Economy, Finance and Industry Kwik Kian Gie said the President would make a final decision on Chandra Asri's financial problems.

He said the Financial Sector Policy Committee (FSPC), which groups several senior economics ministers, had already discussed the various options to resolve Chandra Asri's huge debt problems.

"I'm only waiting for the right moment to consult (the FSPC decision) with the President, and he will make the final decision," he announced following a luncheon with visiting Brunei Sultan Hasanal Bolkiah.

But Kwik stressed that the meeting between Abdurrahman, popularly called Gus Dur, and Marubeni's president would not only focus on Chandra Asri but also on overall economic cooperation because Marubeni was a business conglomerate.

"There are several options which are basically aimed at restructuring Chandra Asri's debts so that the company can continue operating," he said.

Kwik said that a resolution to the Chandra Asri debt might end up with the government owning 80 percent of the company and Marubeni 20 percent through a debt-to-equity swap.

"The share ownership will change to 80:20," he said.

Kwik did not provide further details.

Chandra Asri is the country's largest ethylene producer with a production capacity of 520,000 metric tons of ethylene per year.

The company was a joint venture formed in the early 1990s between Japan's Marubeni, Showa Denko and Toyo Engineering, and local partners Bimantara and the Barito Group.

Bimantara is a business group owned by Bambang Trihatmodjo, a son of former president Soeharto.

Marubeni, the largest foreign shareholder (21.2 percent) also led a consortium providing millions of dollars in loans to Chandra Asri.

The Indonesian Bank Restructuring Agency (IBRA), a unit of the finance ministry, took over Chandra Asri after the company failed to repay some Rp 2.92 trillion (US$371.97 million) in loans to several domestic banks.

Chandra Asri is one of IBRA's largest debtors. The agency has taken over some Rp 200 trillion worth of bank nonperforming loans in a bid to restructure the country's banking system.

The FSPC took over the Chandra Asri case, after IBRA failed to reach an agreement with Marubeni on how to restructure the company's debts, and how to dispose of Chandra Asri's assets.

The Japanese creditors have reportedly demanded the Indonesian government take over Chandra Asri's debts as a condition for a debt restructuring deal. But the government has so far rejected the proposal.

Experts have said that the government had to handle the Chandra Asri case carefully in order to maintain a good relationship with Japan, which is a major creditor of Indonesia.

BP Amoco PLC of the UK was reported late last year to be interested in buying a significant stake in Chandra Asri once the government had reached a debt restructuring agreement with Marubeni.

IBRA has a mandate to raise proceeds through the sale of its various assets to help finance the state budget.

BP Amoco Chemicals Indonesia was seeking to merge Chandra Asri with its local polyethylene plant PT Petrokimia Nusantara Interindo. (rei/prb)