IBRA plans legal action against 2 Tirtamas firms
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) is considering legal action against two indebted companies from the Tirtamas Group which have failed to cooperate with efforts to settle their debts with the agency, an IBRA executive said.
Hendro Santoso identified the two uncooperative companies as chemical firm PT Sumi Asih and commodity trading firm PT Tirtamas Comexindo.
"Sumi Asih is now under the control of our litigation unit," he said during a media conference, declining to say when legal action would be taken.
He said Tirtamas Comexindo had recently been transferred to the agency's legal division.
Sumi Asih owes IBRA Rp 29.30 billion plus US$3.50 million in foreign exchange loans, while Tirtamas Comexindo owes the agency Rp 69.70 billion plus $95.70 million.
The companies are two of nine Tirtamas Group companies which owe a combined Rp 3.59 trillion in principal debts to IBRA, including $218.47 million in foreign exchange loans, making the group the sixth largest indebted business group under IBRA's control.
The companies' debts were transferred to IBRA by state-owned and private banks as part of the country's bank restructuring program.
IBRA is attempting to recover some Rp 235 trillion in non- performing loans owed by thousands of Indonesian companies to help finance the bank restructuring program.
Tirtamas Group is controlled by tycoon Hashim Djojohadikusumo. Several of the group's companies are joint ventures with former president Soeharto daughter Siti Hediati Prabowo, who is also Hashim's sister-in-law.
The group originally had 10 companies which were indebted to IBRA, but multifinance firm PT Harita Kencana Finance repaid its Rp 3.17 billion debt to the agency.
The group's largest indebted company is holding investment firm PT Tirtamas Majutama, which has investments in the petrochemical, power generation, cement and cigarette industries.
Hendro said the process of restructuring Tirtamas Majutama's Rp 1.81 trillion plus $55.38 million in debts was sluggish because the company was unable to provide documents on the flow of its debts and its ownership in Pacific Resources Investment Ltd.
He said Tirtamas Majutama received in July 1997 a one-year Rp 1.63 trillion loan from state Bank Bumi Daya, state Bank Negara Indonesia, privately owned Bank Lippo and the now defunct Bank Papan Sejahtera, which was part of the Tirtamas Group, to establish PT Trans Pacific Petrochemical Indotama (TPPI).
Hendro said the company failed to repay the principal and interest of the loans, with the exception of having made payments to Bank Lippo for the first three months after it received the loan.
However, in ensuing months the company failed to service its debt to Lippo.
Hendro said that based on information obtained by IBRA, the flow of the Tirtamas loans to TPPI was through a 10 percent equity participation in the latter, equivalent to Rp 90.2 billion, and a Rp 500 billion loan to Pacific Resources Investment Ltd., which controls a 60 percent stake in TPPI through PT Trans Pacific Petrochemical Ltd.
"Until now there's no explanation on where the remaining Rp 1.04 trillion (from the four banks) went or on the ownership of Pacific Resources, although IBRA has asked several times," Hendro said.
Hendro also noted restructuring the debts of publicly listed cement maker PT Semen Cibinong was slow because it involved foreign creditors, including Chase Manhattan Corp., U.S. Exim Bank, Deutsche Bank AG and ABN AMRO Bank.
"The debt restructuring talks were nearing their final stage in July, but were stopped after a company statement that some $250 million from its balance sheet was missing," Hendro said, adding that the money was meant to be used to repay part of the company's debts.
He said a financial audit of Semen Cibinong was expected to be completed at the end of this month.
The other indebted firms from the Tirtamas Group are concrete producer PT Trumix Beton, shipping operator PT Comexindo Maritime, palm oil plantation PT Tidar Kerinci Agung, property developer PT Panca Muspan and investment firm PT Maharani Paramitra. (rei)