Tue, 09 Nov 1999

IBRA to reshuffle PT Chandra Asri

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) will reshuffle the key management of the country's largest petrochemical operation, PT Chandra Asri, in a bid to help accelerate the company's debt restructuring process, according to IBRA deputy chairman Eko S. Budianto.

"IBRA will place two of its people at Chandra Asri to oversee the agency's interests," Eko told reporters on Monday.

"But we will not replace the company's president director," he added, referring to newly appointed Chandra Asri president E.C. Neloe.

Eko said that a foreigner with extensive experience in the oil and petrochemical industry would take over the finance director position, while the audit director would be given to an Indonesian.

"We already have the candidates but we can't disclose their identities right now," he said.

Chandra Asri was placed under the control of IBRA in April after it failed to settle debts of about Rp 2.65 trillion owed to state-run Bank Bumi Daya, Bank Dagang Negara and nationalized Bank Danamon.

IBRA took over the debts because it has been in a non- performing category.

Chandra Asri is now one of IBRA's 20-largest bad debtors.

Chandra Asri is a joint venture between Japanese investors led by the Marubeni Corp. with a 24 percent stake and local investors which include the Bimantara Group and the Barito Group.

Eko said that IBRA had yet to reach a debt restructuring agreement with Marubeni over Chandra Asri's debt.

He said that one possibility was through a debt to equity swap.

"We have yet to agree on the numbers," he said.

BP Amoco Plc. of the U.K. has said that it would acquire IBRA's stake in Chandra Asri once a debt restructuring program had been reached.

Chandra Asri produces ethylene, polyethylene and propylene, the raw materials for plastics.

The project has been plagued by controversy since it was built in 1992 including allegations of marking up the value of the project and suffering from a lack of efficiency.

Meanwhile, group head of the loan workout division at IBRA Irwan Siregar said that there had been positive progress over debt restructuring talks with 20 of its largest bad debtors.

Irwan pointed out textile firm Apac Group which owes some Rp 1.4 trillion, PT Bakrie Nirwana Resort which owes US$132 million, PT Bukit Welirang Indah (Rp 1 trillion) of the Sekar Group, PT Cisadane Raya Chemicals (Rp 1.1 trillion), PT Kertas Basuki Rahmat ($250 million) and PT Pasifik Satelit Nusantara (Rp $42 million plus Rp 480 billion).

But Irwan admitted that the agency experienced difficulties with the other debtors including PT Banten Jaya Persada, which owed Rp 1.4 trillion in bad debts.

The Kompas daily said that Banten Jaya, which belongs to the Kalla Group, is a conglomerate owned by Minister of Trade and Industry Jusuf Kalla.(rei)