Private debt talks to be held in NY
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)