HK firm to tender Bakrie debt

HK firm to tender Bakrie debt

HONG KONG (AFP): Hong Kong-based debt consultancy Asia Debt Management has offered to take control of some US$1.1 billion in debt owed by troubled Indonesian conglomerate Bakrie and Brothers to creditors.

The company said the move, if successful, could set a trend for dealing with Asia's problem debts.

Under the scheme Asia Debt Management will make an offer to the more than 300 creditors to the Indonesian company to buy their debt in return for units in a newly established fund.

Asia Debt Management director Robert Appleby said on Tuesday that pooling the interests of creditors -- who range from bond holders to syndicated loan participants -- would maximize the chances of recovering the debt.

He said managing all claims in one pool would streamline administration and reduce legal fees for individual creditors. Appleby added the scheme would also benefit Bakrie, which is currently trying to finalize a restructuring package.

"Bakrie has over 300 creditors and trying to communicate has been a huge problem," he told AFP.

"It is so difficult to tell whether the restructuring process will be approved by creditors."

"If you get a rehabilitation package through and you cannot get approval from one creditor who has not got the time to vote it stymies the whole process," he said.

Asia Debt Management said the fees it receives will be contingent on its performance in recovering debts from Bakrie. But it stressed it did not expect all monies to be recovered.

Appleby said he expected a growing number of such schemes to help Asian companies, many of which are struggling under a mountain of debts following the region's economic crisis.

"I think the potential is huge, absolutely massive and we are very excited," he said.

For the proposal to go-ahead, Asia Debt Management said a pool of at least $30 million worth of debt is needed.