IBRA to complete $3.7b worth of debt restructuring

IBRA to complete $3.7b worth of debt restructuring

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
expects to complete Rp 26 trillion (US$3.7 billion) worth of debt
restructuring deals with corporate borrowers by the end of March,
an agency official said.

The head of the agency's loan restructuring division, Ronald
Sinaga, said on Wednesday IBRA was either in the final stages of
the debt restructuring process or completed with the process for
the Rp 26 trillion in debts.

"We are sure we will achieve that figure as some companies
have actually signed the deal, others will sign the deal by the
end of January and the remaining by the end of March," Ronald
said.

Corporate debtors, according to IBRA's classification, are
those with outstanding debts of more than Rp 5 billion. Those
with debts of Rp 5 billion or less are classified as retail
debtors.

Ronald said about 150 corporate debtors with a total Rp 26
trillion in debt were divided into 26 groups based on the
business sectors they fell under.

The agriculture sector accounts for the largest total debt,
with 20 corporate borrowers with a total outstanding debt of Rp
2.8 trillion.

Other debtors come from the telecommunications sector, with
three corporate debtors with a cumulative debt of Rp 1.5
trillion, hotel and office building (17 debtors with Rp 1.7
trillion in debt), petrochemicals (seven debtors, Rp 1.2
trillion), textile (10 debtors, Rp 1.8 trillion), trade and
distribution (15 debtors, Rp 5 trillion) and toll road operators,
with one corporate borrower with a total debt of Rp 2.9 trillion.

Meanwhile, Achmad Fajar Prana, an official from the loan
restructuring division for retail borrowers, said IBRA was
offering retail borrowers discounts on overdue interest payments
if they repaid their outstanding debts between Jan. 20 and Feb.
21.

"Those who repay between 20 percent and 39 percent of their
principal debt will receive a 25 percent cut in their overdue
interest payments," Achmad said.

Those repaying between 40 percent and 59 percent of their
principal will receive a 30 percent cut in overdue interest
payments.

Retail debtors repaying between 60 percent and 79 percent will
get a 40 percent discount, those repaying between 80 percent and
99 percent will get a 45 percent discount and those repaying
their entire principal will get a 100 percent cut in their
overdue interest payments, Achmad said.

All penalty charges incurred due to the late payments will
also be waived, he added.

Achmad said companies which did not repay their total
principal debt should continue to service the remaining unpaid
outstanding principal at either Bank Danamon or Bank Central
Asia.

IBRA has appointed the two as the refinancing banks for its
debt restructuring program.

IBRA will transfer its receivables from retail borrowers to
Bank Danamon and Bank Central Asia in February, meaning the
borrowers will at that time become customers of the two
refinancing banks.

Achmad said the interest payment discount program for retail
borrowers, called the crash program, would only be for retail
borrowers of certain closed private banks, including Bank Orient,
Bank Dewa Rutji, Bank Bumi Raya Utama, Bank Budi Internasional,
Bank Sanho and 13 other banks that were closed in March last
year.

Debtors from other closed private banks will benefit from the
same discounts when the agency launches its next retail borrowers
crash program.

Achmad also said the program excluded mortgage debtors because
these debtors would be taken care of by a special team at the
agency. (udi)