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Mon, 09 Feb 1998

JP/IFC pledges to help clients settle debts

IFC pledges to help clients settle debts

JAKARTA (JP): The International Finance Corporation (IFC), the private sector arm of the World Bank, is currently reviewing the performance of its 42 clients in Indonesia to assess their liquidity requirements and their capacity to service their foreign debts.

"We are fully committed to helping ensure that the long-term viability of our clients is preserved and the interests of the creditors are protected," said Assaad Jabre, the head of a visiting IFC team over the weekend.

Jabre, IFC Vice President, said in a statement that IFC and a number of international banks had thus far disbursed US$1.1 billion in equity and loan funds to 42 companies in the country.

Jabre and a team which included Rashad Kaldany, director of the Asia Department, and Hany Assaad, manager of the Asia Capital Markets and Antonio David, the IFC regional representative in Jakarta, spent the whole of last week assessing first hand the impact of the financial crisis on Indonesian enterprises, notably its 42 clients.

"Several teams of IFC staff are currently in the country or will be arriving here shortly to assess the performance of its 42 IFC clients on a case-by-case basis," Jabre added.

He said IFC endorsed the fundamental principles applied by the Indonesian Corporate Debt Settlement Team, headed by Radius Prawiro, in its initiatives to arrange creditor-debtor negotiations.

The fundamental principles are that debts negotiations are voluntary and subject to mutual agreement and on a case-by case basis and that debtors which are sound and able to service their foreign debts should do so.

Radius disclosed last week that Indonesian foreign debts as of December totaled $137.42 billion, of which $63.46 billion was owed by the government and state enterprises, $30.52 billion by foreign firms and Indonesian-foreign joint ventures, $23.07 billion by private national firms, $8.46 billion by national and foreign finance institutions and $11.90 billion in commercial papers and medium-term and promissory notes. (vin)