Pakuwon's restructuring talks on track

Pakuwon's restructuring talks on track

JAKARTA (JP): Property developer PT Pakuwon Jati said here on
Friday that talks with creditors over the company's debt
restructuring proposals have showed good progress.

Pakuwon president Esron Siburian said that he was confident
that the company would sign the US$129.8 million and Rp 350
billion debt restructuring deal with all its creditors by the end
of this year.

Esron said that Pakuwon suffered from financial difficulties
because it had to cover a great foreign exchange loss due to its
large U.S. dollar debt exposure.

"Pakuwon's U.S. dollar obligation was never hedged because the
company received its revenue in dollars," he said.

However, when the monetary crisis -- which first hit in mid
1997 -- deteriorated, the company began to suffer financially
because its clients paid its dollar-quoted rent fees in rupiah.

Esron said that in the debt restructuring program Pakuwon
would convert some of its debts into eight-year term bonds.
Pakuwon was also ready to repay the other loans with the
company's fixed assets in the form of cleared land for
development, he added.

"We would also convert our U.S. dollar denominated debts into
rupiah to be conservative," he said.

Pakuwon is one of 85 listed companies on the watch list for
possible delisting by the JSX.

Companies on the watch list, according to the exchange's
listing regulation, are those with unsound equity or doubtful
business prospects as declared by their respective public
accountants.

Pakuwon booked a net loss of Rp 744 billion in 1998, as
compared to a net loss of Rp 114 billion the previous year.

The property developer operates on renting as well as selling
office space, shopping center space and residential housing. (udi)