Kadin hails creditors' moves on loans to firms
Kadin hails creditors' moves on loans to firms
JAKARTA (JP): Chairman of the Indonesian Chamber of Commerce
and Industry (Kadin) Aburizal Bakrie hailed on Wednesday efforts
by several international creditors to renegotiate loan repayments
from local companies.
Aburizal said out-of-court settlements were the best approach
in dealing with the country's mounting private debt because they
benefited both parties.
"I really appreciate such a decision and I expect more
creditors and more debtors would resort to such an approach in
dealing with their debts," he said.
Several foreign creditors have approved proposals of
Indonesian clients to renegotiate their loans. Ometraco, for
example, announced recently that the company and its foreign
creditors had agreed to form a special team to renegotiate its
loan.
Aburizal said Ometraco's approach should be followed by other
local companies because it was the only avenue for local debtors
to survive the crisis and repay their loans.
He said out-of-court settlements were preferable both to
debtors and creditors because any court ruling would leave both
with the remnants of the company to fight over.
Aburizal said Indonesian borrowers had to talk directly about
their debt problem with their creditors even though the country's
private foreign debt settlement team and foreign creditors had
signed a deal in Frankfurt in June.
He said the Frankfurt debt accord should be followed by
bilateral talks between borrowers and creditors.
"The International Monetary Fund's concern on Indonesian
companies foreign debts, implemented in its latest agreement with
the government, is very positive. I hope that the meeting with
300 creditors on Nov. 2 to Nov. 3 in Jakarta will bring more good
news."
The corporate sector's total foreign debt amounts to more than
US$64 billion, of which $34 billion is due this year.
Aburizal said he also hoped that Indonesian companies could
fully benefit from the Jakarta Initiative scheme to settle their
domestic debts out of commercial court.
The Jakarta Initiative's task force, which will open its
operations next month, was expected to be able to set an
appropriate basis for the private sector's domestic debt
settlement, he said.
The government introduced last month the Jakarta Initiative, a
move to spur the recovery of the paralyzed private sector by
providing incentives and eliminating regulatory obstacles to
reaching out-of-court domestic corporate debt restructuring
agreements.
A four-point plan outlines the steps which debt-ridden
companies should take when negotiating agreements with creditors
on corporate and debt restructuring in order to give them access
to working capital.
According to the private debt settlement team, the country's
private sector debt owed to domestic banks was Rp 691.7 trillion
($57.64 billion) as of June. (gis)