IBRA threatens to confiscate Djajanti's assets
IBRA threatens to confiscate Djajanti's assets
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) has threatened to confiscate the assets of plantation and fishery interest Djajanti Group unless it provides the agency with a lump payment of Rp 206.5 billion (US$23.7 million) in cash as part of its debt restructuring deal.
The agency, in a letter dated June 28 (Wednesday), a copy of which was made available to reporters, gave Djajanti until Thursday to provide the cash.
Djajanti's commissioner, Effendi Sasrawijaya, said the company could not comply with the order and would seek a legal solution to its dispute with the agency.
"We reject the order and will seek a legal solution," Effendi told reporters on Thursday.
Effendi said the company regretted the fact that the agency had never responded to any debt restructuring proposals made by the company.
On Wednesday, the company sent its latest debt repayment proposal to the agency, but Effendi said IBRA had thus far not responded.
Djajanti, which is among the country's 21 largest obligors whose debts have been taken over by IBRA, has a total debt of about Rp 2.7 trillion.
IBRA, which initially categorized Djajanti as an uncooperative company, demanded it pay Rp 270 billion up front, or 10 percent of its debt, to demonstrate its cooperative attitude. Otherwise, the agency would file a bankruptcy petition against the company.
Djajanti first told IBRA that the company did not have such an amount of money, and instead proposed providing Rp 25 billion in the first cash payment and paying the rest in installments over three years.
Under the new debt proposal, the company raised the amount of the first cash payment to Rp 50 billion.
Djajanti, which has 70 percent of its plantation and fishery plant assets in Maluku and Irian Jaya, is now facing difficulties in its operations following the one-and-a-half-year-long religious violence in Maluku and the rising separatist movement in Irian Jaya.
Djajanti borrowed Rp 930 billion from Bank Dagang Negara for one of its plantation units in 1994. Lured by the low interest rate of dollar loans, the company later converted the loan into dollars.
However, the loan soared to Rp 2.7 trillion amid the economic crisis sparked by the sharp depreciation of the rupiah against the dollar in 1997.
Effendi noted that some American financial companies were now eying Djajanti and hoping that IBRA filed a bankruptcy petition against the company and that the court would declare the company bankrupt so they could buy it at low price.
He warned that the American firms might have the intention of supporting the separatist movement in Irian Jaya.
Meanwhile, former Irian Jaya governor Izaac Hindom, who is currently a member of the Supreme Advisory Council, warned IBRA of the consequences of its plans to confiscate Djajanti's assets or file a bankruptcy petition against the company.
He said thousands of Irianese who work for Djajanti's plantation and processing plants in Irian Jaya would be in danger of losing their jobs if the agency realized its plan and that this would aggravate sociopolitical problems in the province.
Djajanti employs about 50,000 people in Maluku and Irian Jaya, including a large number of local people.
Izaac also called on IBRA to prevent any foreign companies from taking over Djajanti's assets in Irian Jaya, also warning that the foreign investors might be supporting the separatist movement in the province.
"It will be a bad thing if IBRA allows foreign firms to buy the company's assets. The people who want Irian Jaya's independence will be happy because that might speed up the independence process," Izaac told reporters. (jsk)