RI corporate debtors set up contact committee

RI corporate debtors set up contact committee

JAKARTA (JP): Indonesia's private corporate debtors
established a contact committee yesterday to move forward on
negotiations with their foreign creditors.

The chairman of the Corporate Foreign Debt Settlement Team,
Radius Prawiro, said yesterday the Contact Committee,
representing about 1,000 Indonesian companies, would negotiate
with a steering committee of foreign lenders.

"This is the first meeting we conducted to talk about the
(contact) committee," Radius said after the meeting with local
business leaders.

Members of the Contact Committee include Anthony Salim of the
giant Salim Group, The Nin King of the Argo Manunggal Group and
Rachmat Gobel of the National Gobel Group.

The three businessmen are also members of the Corporate
Foreign Debt Settlement Team.

No information was immediately available as to the other
members of the Contact Committee.

Ten major international banks met with the chairman of UBS
East Asia, Lim Ho Kee, in Singapore yesterday to form the
Steering Committee representing Indonesia's foreign lenders.

Banks which have agreed to join the Steering Committee include
the United States' Bank of America, Chase Manhattan and Citibank,
Japan's Bank of Tokyo Mitsubishi and Sanwa Bank, the Netherland's
ABN Amro, Germany's Deutsche Bank, France's Bank Nationale de
Paris, Britain's Hong Kong Shanghai Bank, Singapore's OCBC, and
Hong Kong's Standard Chartered.

Radius, who is also an economic advisor to President Soeharto,
said the Steering Committee would establish guidelines on debt
negotiations and the solutions to the debt problems.

Both the steering and the contact committees will likely start
negotiations here next week, he said.

"With the establishment of these two committees, the
communication between lenders and debtors will be easier," he
said.

Radius announced recently that the country's private sector
debts amounted to US$73.96 billion -- $23.07 billion of which was
owed by private Indonesian companies while the remainder was owed
by foreign firms and joint-venture companies.

The rupiah's more than 70 percent fall in value against the
dollar since July has virtually halted all foreign interest and
principal payments by Indonesian debtors.

The government appointed Radius last month to head the
settlement team seeking the rollover of debts.

Radius said 228 companies have foreign loans of over $50
million, while about 700 owed less than $50 billion.

He said the team had divided Indonesian private debtors into
two categories.

The first category is composed of private national debtors
capable of servicing their debts and wholly foreign-owned firms
and joint-venture companies which will not be given assistance by
the team.

Radius said some large local companies, such as those
belonging to the Bakrie Group, would also conduct their own
negotiations with creditors without the help of the team.

The Bakrie Group is scheduled to begin negotiations with its
creditors next week, he said.

The second category includes locally owned companies with
financial difficulties needing the help of the settlement team in
negotiations with their creditors, he said.

He said all the companies were required to submit their
financial and operation restructuring plans to their lenders
immediately so the team could place each company into one of the
categories.

If required, the team could act as the facilitator to settle
outstanding foreign debt problems, he said.

Debtors and creditors will hold debt negotiations on a
case-by-case basis and any settlement should be made voluntarily,
Radius said.

"Accordingly, we could have win-win solutions," he said.

Indonesian business leaders who attended the meeting yesterday
included timber and chemical tycoon Prayogo Pangestu, Gajah
Tunggal Group's Benny Nursalim, Danamon Bank president Ninie
Admajaya, property mogul Ciputra, Gemala Group's Sofyan Wanandi
and President Soeharto's son Hutomo Mandala Putra. (das)