Polysindo to complete restructuring

Polysindo to complete restructuring

JAKARTA (JP): The country's largest integrated textile
producer PT Polysindo Eka Perkasa, a member of the debt-ridden
Texmaco Group, is hoping to finalize its debt restructuring
program with the Indonesian Bank Restructuring Agency (IBRA) by
year-end.

"The negotiations between the company and IBRA are still
underway. I'm hoping we can achieve a debt settlement agreement
by the end of the year," Tunaryo, the company's corporate
secretary, said on Thursday.

He added that the ongoing negotiations were in line with the
Master Restructuring Agreement (MRA) signed in May between the
Texmaco Group and IBRA.

Under the MRA, the restructuring consists of three key points.
First, the delay of debt principle repayments of up to eight
years; second, a concession in the debt interest rate; and third,
a debt-to-equity swap mechanism.

The company's debt per December last year stood at US$1.39
billion, of which $245 billion was owed to IBRA.

Polysindo finance manager Gopala Krishna said that the company
would have to allocate more than $50 million to repay debt
interest alone.

He added, however, that if the debt-to-equity swap system
could be agreed, the debt would total only $900 billion.

"With that sum of money, and the assumption of a five percent
interest rate, we'll only have to pay some $40 billion in debt
interest next year," he said without elaborating further.

The Texmaco group, which is divided into textile and
engineering divisions, owed around $3.08 billion to IBRA as of
January this year and $1.65 billion to other creditors. (10)