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.