Indocement owners approve debt restructuring plan

JAKARTA (JP): The extraordinary general shareholders meeting of publicly listed cement producer PT Indocement Tunggal Prakarsa approved on Friday the company's US$1.1 billion debt restructuring plan.

Indocement's debt restructuring plan obtained the approval of 98.9 percent of the shareholders.

The meeting also approved the merger of Indocement and its subsidiaries PT Indocement Investama and PT Indo Kodeco Cement, with Indocement as the surviving entity.

"The shareholders' approval is prerequisite to finalizing the debt restructuring deal," Indocement investor relations manager Sahat Panggabean said.

Under the debt restructuring deal, the company would reschedule its $1.1 billion debt over eight years, with a two- year grace period, Indocement said.

For debts in US dollars, the interest rate will be set at two percentage points above the London Inter-Bank offered rate.

As for rupiah debts, the interest rate has been set at two percentage points above the average six-month time deposit rate of state banks.

The debt restructuring scheme has received 99.7 percent approval from Indocement's creditors.

Sahat, however, fell short of naming the creditors, saying only that Bank of America headed the creditors' steering committee and that Japan's Marubeni was Indocement's biggest creditor.

"The debt restructuring scheme also includes a debt-to-equity deal with Marubeni," Sahat said.

He said Marubeni would convert part of its loans, or $26.21 million, into Indocement equity.

According to Indocement, its creditors are still preparing the documents, but it expects a final agreement later this month.

"Merging Investama and IKC is another part of the debt restructuring deal," Sahat said.

He also said the German-based cement company Heidelberger Zement A.G. was set to acquire a stake in Indocement.

Heidelberger will buy out part of Indocement's debts and convert them into shares later, he said.

Heidelberger, Sahat added, was waiting for Indocement to conduct a rights issue before taking this step.

"We must hold another shareholders meeting to approve the entrance of Heidelberger. We expect the meeting to be held by December," Sahat said.

Indocement shareholders appointed on Friday Mahmuddin Yasin as the company's new commissioner, without changing the current board of commissioners.(bkm)