Marubeni, Indonesia sign Chandra Asri bailout details

Marubeni, Indonesia sign Chandra Asri bailout details

Dow Jones, Jakarta

Indonesia's Bank Restructuring Agency, or IBRA, said Friday that it's signed a final agreement with Japanese creditors led by Marubeni Corp. to restructure PT Chandra Asri Petrochemical Center.

The agreement, signed this week, formalizes an earlier memorandum of understanding.

As reported, Marubeni, which leads Japanese creditors that are owed US$731 million, have agreed to take a 24.59 percent stake in the petrochemical company in a debt-for-equity swap covering $147 million of the debt.

The remaining $584 million will be repaid over the next 15 years with interest rates set at 1.25 percentage points above the London interbank offered rate, or Libor.

IBRA will swap $417 million of its debt for a 25.86 percent stake in the company. Chandra Asri will repay IBRA $100 million of its debt on the same terms as the Japanese creditors.

Chandra Asri failed after the 1997-1998 Asian financial crisis after years of over-borrowing from local banks at a time when global petrochemical prices were falling due to oversupply.

IBRA ended up with a large chunk of loans to Chandra Asri after it stepped in to rescue banks after the crisis.

The company's founder, Indonesian Prajogo Pangestu, will hold a 49.55 percent stake after the restructuring compared with 76.19 percent before the restructuring.