Private debt talks to be held in NY

JAKARTA (JP): Negotiations to settle Indonesia's private sector debt of $68 billion will be held in New York mid-April following the conclusion of the first phase of negotiations in Singapore on Monday, Deutsche Bank said in a statement.

The negotiations will address the implementation of a broad framework agreed to Monday between the government and 13 international banks that make up a "steering committee" of Indonesian lenders.

"Now that phase one of the discussions has been successfully concluded in record time, it is appropriate to address the detailed implementation of the approach that has been developed.

"Accordingly, it was agreed that further meetings would be held in New York in mid-April for these purposes," Deutsche Bank said.

As part of the move to develop an implementation plan, Deutsche Bank said the steering committee would be led in the next phase of discussions by three co-chairmen: one from Japan, one from Germany and one from the United States.

Previously, the committee was chaired by Standard Chartered Bank PLC's David Brougham.

Deutsche Bank said that under the new framework, the involvement of the Indonesian private external debt team, led by former finance minister Radius Prawiro, had been expanded to include Bank Indonesia, the Indonesian government and the International Monetary Fund.

The government has said that a debt resolution plan based on the Mexican "Ficorca" model would be put in place in Indonesia.

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.

This debt plan for Indonesia is seen as part of a wider US$43 billion IMF-led bailout package for the country. (rid)