JIHD to restructure $70m in debts

JAKARTA (JP): PT Jakarta International Hotels and Development (JIHD) and its creditors signed a deal here on Friday outlining the restructuring of the company's US$70 million in debts, the hotel operator said on Friday.

Under the agreement, the company's debts will be extended seven years from the original due date of January 1998, with a five-year put option.

"At the end of the five-year term the parties will have the option of either extending the restructuring term or refinancing the facility," JIHD said in a statement.

Interest rates for the initial three years of the restructuring vary from between 4 percent and 6 percent, and will subsequently revert to the London interbank offered rate and an appropriate margin, it said.

Throughout the restructuring term, lenders will retain their collateral, which consists of security over the hotel's assets, including the land, improvements, movable equipment and receivables.

The agreement was reached after two years of negotiations between JIHD's management and the syndicate's lead bank, The Royal Bank of Scotland Plc in Singapore, following an independent accountant's report prepared by consultancy firm Ferrier Hodgson, it said.

The debts, which were originally signed in January 1995 and fell due in January 1998, were used to finance renovations for Hotel Borobudur.

The statement said the loan would be serviced from surplus cash derived principally from hotel operations.

JIHD, listed on the Jakarta Stock Exchange, owns the Hotel Borobudur Jakarta and a property development site in the Central Business District on Jl. Sudirman, through its subsidiary PT Danayasa Arthatama. (tnt)