Habibie, Prayogo confer on Chandra Asri's fate
JAKARTA (JP): President B.J. Habibie summoned business tycoon Prayogo Pangestu on Thursday to discuss the fate of his company PT Chandra Asri Petrochemical Center.
Prayogo, reportedly listed as the third largest debtor to state banks, after former president Soeharto's two sons, played down the meeting. He said the discussion concerned a reconstruction project in Mangole Island, Maluku, which was damaged by an earthquake in December.
Prayogo has a timber plant on the island.
"The President asked me to help rebuild the island, which was recently destroyed by a quake," Prayogo said after the meeting at Merdeka Palace.
Habibie was accompanied by Minister of Finance Bambang Subianto, State Minister of Empowerment of State Enterprises Tanri Abeng and Minister of Industry and Trade Rahardi Ramelan.
Bambang and Rahardi refused to comment to waiting journalists after the meeting.
Prayogo, who appeared tense, almost entered Tanri's car, which was parked next to his BMW limousine.
When a journalist shouted: "What will you do with your debts?", Prayogo shook his head and said "no, no, no".
Tanri finally revealed the substance of the meeting, only after providing a lengthy explanation about the progress of the privatization and profits of several state-owned companies.
"The subject of the meeting was to discuss Chandra Asri's (value) as quite a strategic industry."
Repayments
Last year, a leading Japanese newspaper, Nihon Keizai Shimbun, reported that the company asked a consortium of banks for a three-year moratorium on repayments of a US$830 million loan.
Chandra Asri is a joint venture between Japanese companies Marubeni Corp and Showa Denko KK, and Indonesian partners including PT Bimantara Citra, owned by Soeharto's son Bambang Trihatmodjo, and PT Barito Pacific Timber, owned by Prayogo.
The country's only ethylene producer was set up with the backing of an investment firm established by Japanese participants.
The $1.88 billion venture has produced 510,000 tons of ethylene and 300,000 tons of polyethylene annually since 1995.
Tanri indicated that a government team led by Bambang Subianto would formulate the policy of Candra Asri's restructure as a part of real sector development.
"There will be no exception. He (Prayogo) must follow the rules of the game issued by the ministry of finance."
Tanri confirmed that foreign companies, including a German firm, had expressed interest in Candra Asri stakes. He said a due diligence was still underway.
Prayogo, known as one of former president Soeharto's closest associates, reportedly owes Rp 2.6 trillion ($288 million) to state banks, the third largest after Bambang Trihatmodjo and his associates (Rp 1.9 trillion, $2.7 billion) and Hutomo Mandala Putra (Rp 1.7 trillion, $400 million).
When asked to comment about his huge debts, the owner of the 7.16 percent stake at PT Astra International replied "It is not news".
His publicly listed Barito Pacific Group owns 2.7 million hectares of forest concession throughout the country. (prb)