Sat, 11 Sep 1999

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)