No agreement on RI corporate debt plan: Banker

No agreement on RI corporate debt plan: Banker

NEW YORK (Reuters): Global bankers have not reached any
arrangement that would allow debt-laden Indonesian companies to
postpone the repayment of capital, but a restructuring program is
being considered, a banker involved with the talks said
Wednesday.

"It's premature to think that the banks have agreed on any
formulation at this stage," the banker said. "It's premature to
think that any formal decisions have been made."

Japan's Nihon Keizai Shimbun newspaper reported on Wednesday
that Standard Chartered, which headed the bank committee, had
crafted a plan to allow Indonesian firms to postpone principal
repayments for six months, but maintain interest payments.

Standard Chartered declined to comment on the report. But the
story of a postponed principal payment seemed to be consistent
with a 1983 Mexican restructuring program that Jakarta reportedly
has been studying.

Mexico implemented the "Ficorca" program to defray the impact
of a massive 1982 peso devaluation on its corporations, by
allowing them to repay their debt in pesos rather than dollars to
the Ficorca, which then paid foreign creditors.

Ficorca restructured the corporate debt over an eight-year
period, but only made interest payments over the first four
years, and began repaying capital after four years.

The banking source said many creditors view a Ficorca-type
solution as a potential antidote to Indonesia's crisis, in which
hundred of companies have been unable to pay their debt because
of a dramatic fall in the rupiah.

"Something they're looking at is a mechanism to provide the
foreign exchange to service debt, but how you go about doing that
remains to be seen," the banking source said.

In Jakarta, Indonesia's presidential advisor on private debt,
Radius Prawiro, said yesterday that more meetings were necessary
to find a suitable solution to Indonesia's $68 billion private
foreign debt overhang.

After receiving a proposal from Standard Chartered's David
Brougham, who heads the committee representing interests of the
country's foreign lenders, in a meeting yesterday, Radius said
talks will continue today.

Radius refused to reveal the differences between the plan
proposed by the committee representing the Indonesian debtor
companies and that proposed by Brougham. But when asked if a
Mexican-style Ficorca plan was the backbone of both proposals, he
said 'there are elements that are similar.'

'We must study the proposals and review their substance,
before knowing what the outcome will be,' Radius said without
giving any specifics on timing.