ITB seeks solution to corporate debts
ITB seeks solution to corporate debts
JAKARTA (JP): The 34,000-strong alumni association of the
Bandung Institute of Technology (ITB) called on the government
yesterday to set up a team to resolve the corporate debt problem.
The association's spokesman, Amir Sambodo, told a hearing with
members of the House of Representative's Commission V that the
team for the Supervision and Resolution of Problem Debt would
help resolve defaulted corporate debts and supervise the
restructuring of corporations unable to pay offshore debts.
"The market still reacts negatively to the rupiah because the
government has not yet issued any definite policy to settle
private debts," he said.
The government has set up a special economic and monetary
council to oversee the nation's intended reforms. It is chaired
by President Soeharto.
But the intended reforms have not impressed the market as the
value of the rupiah continues to slide against the U.S. dollar.
"According to my friends at security companies, the market
isn't sure if our government, private companies and our people
are concerned about corporate debt and are willing to settle the
matter," Amir said.
The country's external debt stood at about US$140 billion at
the end of last year, or about two-thirds of the gross domestic
product. About $30 billion was estimated to mature by March.
About $65 billion of the debt lies in corporate hands and the
rest with the government.
Amir said the team should involve the government,
representatives of the Indonesian Chamber of Commerce and
Industry and experts.
He said corporations with defaulted debts amounting to more
than the value of their assets and facing liquidation could ask
for restructurization after consulting creditors.
The team can supervise the restructuring in agreement with
creditors who are not affiliated with the corporation.
He said the team could use a foreign financial consultant or
securities company to represent the creditors and nation's
interest to search for buyers of up to 51 percent of the shares
issued or transferred in the restructuring process.
Foreign buyers would be prioritized, and the rest of the
shares would be allocated to social, religious and national
bodies, including the workers cooperatives. (09)