RI progressing on debt: Deutsche Bank

RI progressing on debt: Deutsche Bank

FRANKFURT (Agencies): One of Indonesia's leading creditors, Deutsche Bank AG, praised Indonesia for taking major steps to speed up its debt restructuring.

Wolfgang Wendt, head of sovereign debt rescheduling at Germany's largest bank, said on Tuesday Indonesia had faced "immense" difficulties in overcoming its financial market crisis.

"Indonesia has taken important steps to rectify its situation and improvements are already being seen," Wendt told a news conference after hosting a presentation given by Indonesian finance officials to creditor banks in Frankfurt.

Deutsche co-chairs a 13-member Bank Steering Committee representing Indonesia's creditor banks. The other co-chairs are The Bank of Tokyo-Mitsubishi and The Chase Manhattan Bank.

Wendt noted that last month's agreement on a second debt exchange offer extending Indonesian banks' short-term loans gave Indonesia the relief it needed for its balance of payments and gave its banks breathing space.

The Indonesian delegation, headed by Indonesian central bank managing director Dono Iskandar, was in Frankfurt to brief banks on details on the exchange offer and outline modifications to the INDRA scheme.

Iskandar said creditor banks at the meeting had given "good responses" to the presentation.

The INDRA modifications, which are now in force, have made the scheme more flexible and reduced the cash outlays required of debtors in the early years.

INDRA, launched last year, is designed to promote voluntary restructuring of the Indonesian corporate sector's external debt by providing exchange risk cover for debtors, a guaranteed supply of foreign exchange and local currency financing on affordable terms.

Last week, INDRA extended its program's entry deadline from June 30 to Dec.31 due to lack of response.

But at the Frankfurt meeting, INDRA Chairman Sumitro announced that PT Persero Danareksa will join the agency program "within the next few weeks" now that the company has agreed with creditors on restructuring debt.

Indonesian officials said Danareksa's entry is virtually a done deal, and they hope it will set an example for other to join soon.

"We hope that more and more companies will use the (Danareksa) restructuring as a model...and sign on to Indra as well," Bank Indonesia managing director Dono Iskandar said at a press briefing.

Danareksa has reached final agreement with creditors to restructure $366 million in foreign debt.

Last month Indonesia and its creditor banks agreed on a second inter-bank debt rescheduling covering about $3.8 billion in debts due between April 1, 1999 and December 31, 2001, which are to be rescheduled for a maturity of four years, from January 1, 2002 until the end of 2005.