RI team, creditors to meet in New York
RI team, creditors to meet in New York
NEW YORK (Dow Jones): The head of Indonesia's debt team will
meet with foreign bankers in New York today to address the
political changes in the Asian country and prepare for the next
round of debt negotiations scheduled to take place in Frankfurt
on June 1, banking sources said Tuesday.
Indonesia and international bankers are trying to hammer out a
solution to the country's crushing debt burden. Although no
official announcement was made, the meeting implies that team
leader Radius Prawiro and his key people remain at their posts
after last week's political turmoil.
At their last meeting in Tokyo earlier this month, both sides
came close to agree on plans to extend the maturity on about $8
billion in bank debt and to roll over about $7 billion in trade
financing arrangements. About $64 billion in corporate debt also
needs to be addressed.
The restructuring efforts were thrown into doubt last week by
President Soeharto's decision to step down in the face of
mounting protests.
But now with all key players remaining in place and with the
International Monetary Fund envoy in Jakarta, Hubert Neiss to
meet with Indonesia's economic and finance team, negotiations
seem once again on track.
Chase Manhattan Bank, Deutsche Bank AG and Bank of Tokyo-
Mitsubishi -the three co-chairs of the banks' Indonesian steering
committee- met yesterday in New York to discuss the new political
developments in Indonesia and prepare for the Frankfurt meeting.
The banks will then meet with Radius and some of his team
Thursday (today), banking sources said.
One of the main issues on everyone's mind will be how
Indonesia's new president B.J. Habibie will carry out his
promises to reform the country.
Habibie Monday endorsed early parliamentary elections,
although he didn't specify any dates. Habibie succeeded Soeharto
two months into his seventh five-year term.
Bankers said that although the momentum of the debt talks was
put off by political uncertainty last week, the fact that key
Soeharto officials were retained by Habibie allowed the
negotiations to move on.
Chief among those is Coordinating Minister for Economy,
Finance and Industry, Ginandjar Kartasasmita.
With the longevity of the Habibie administration still in
question, bankers said they would take a cautiously positive
approach.
"We're following the domestic situation closely, but we need
to give this situation a little time and see how it plays out," a
banker close to the negotiations said.