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)