IBRA to appeal Sempati bankruptcy decision

IBRA to appeal Sempati bankruptcy decision

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
says it will appeal a Jakarta Commercial Court decision declaring
private airline PT Sempati Air bankrupt.

IBRA public relations officer Franklin Richard said on
Wednesday the agency wanted the Supreme Court to review the
decision in order to clearly establish whether Sempati could no
longer repay its debts.

"We don't want this (the Sempati case) to be a precedent," he
said.

IBRA has some Rp 218.50 billion in nonperforming loans (NPLs)
owed by Sempati.

The agency was established last year to help restructure the
country's ailing banking sector and recover a massive amount of
industry NPLs.

IBRA is expectedly to soon amass over Rp 230 trillion in NPLs
transferred from closed down banks, and the country's major
banks, including state banks, nationalized banks and private
banks recapitalized with government sponsorship.

Richard said that according to the bankruptcy law, creditors
were given eight days to appeal the Commercial Court's verdict to
the Supreme Court.

The Jakarta Commercial Court declared Sempati bankrupt on
Monday at the company's request, the first such ruling since the
court was established last September.

Presiding judge Victor Hutabarat said more than 20 factors
were taken into consideration by the court when voting in favor
of the airline's bankruptcy petition.

"Sempati, for example, does not have adequate funds to operate
as an airline, and it has a large amount of matured debts it is
not able to settle," Victor said.

Sempati, which is jointly owned by former president Soeharto's
youngest son Hutomo "Tommy" Mandala Putra, and Soeharto's close
associate Mohamad "Bob" Hasan, filed for insolvency at the
Commercial Court on June 17, a year after it ceased operations.

Sempati's lawyer Yan Apul said the airline had debts 15 times
larger than its assets, based on the firm's latest balance sheet.

He said Sempati owed some Rp 464 billion (about US$70 million)
to 487 creditors and 321 suppliers, plus another $103.92 million
in U.S. dollar-denominated debt, as of June 8, 1999.

He added that Sempati's assets amounted to Rp 83.42 billion as
of the same date.

Sempati's creditors were reportedly disappointed with the
court decision and believed the bankruptcy petition might have
been engineered by the airline to avoid paying debts.

In addition to Sempati, two other IBRA debtors were also
declared bankrupt last month. They are multi-finance firms PT
Indopac Finance and PT Pacific International Finance, and PT
Indopac Finance, which respectively owed IBRA Rp 513.25 billion
and Rp 97.86 billion.

Franklin said IBRA could no longer appeal the bankruptcy case
of the two debtors due to technical problems, pointing out that
the court's decision was more than eight days old.

It was not clear why IBRA did not file for an appeal
particularly in regard to Indopac Finance, which owed IBRA more
than it did Sempati.

The agency is currently focusing its efforts to recover NPLs
owed by the country's 200 largest bad debtors, in which Sempati
Air is included. The debtors are companies mostly belonging to
well-connected businessmen.

Some 173 of the debtors have signed "a letter of commitment"
to repay their loans as of June 30. The remaining 26 debtors
failed to meet this deadline, but the agency has provided the
debtors more time.

IBRA's deputy chairman Eko S. Budianto said recently the
value of the collaterals put up by debtors might be sufficient to
only cover some 30 percent of the NPLs, because the asset's value
had either been marked up, or had plunged, due to the economic
crisis. (rei)