Marubeni, IBRA sign MOU on Chandra Asri's debt plan

Marubeni, IBRA sign MOU on Chandra Asri's debt plan

TOKYO (Dow Jones): Marubeni Corp. said Tuesday it has signed a memorandum of understanding with the Indonesian Bank Restructuring Agency (IBRA) on a debt restructuring plan for PT Chandra Asri Petrochemical Center, in which the two parties are creditors.

Under the agreement, IBRA will take a 80 percent stake in PT Chandra Asri by converting all of its US$460 million investment to equity, while Marubeni will take a 20 percent stake by converting $100 million, part of its loan, to equity.

Marubeni expects to be repaid the remainder of its investment over the next 12 years, it said.

A Marubeni spokesman wasn't immediately available for comment, but people familiar with the negotiations said last month that the Japanese trading house had invested a total $723 million in the ailing petrochemical giant.

Following the planned financial restructuring, PT Chandra Asri will boost the capacity of its naphtha cracker to 560,000 tons a year from the current 510,000 tons by revamping existing facilities, Marubeni said in a statement.

PT Chandra Asri's olefin center, including the naphtha cracker, in West Java, Indonesia, came onstream in 1995.