Riau Andalan sells assets to pay debts

Riau Andalan sells assets to pay debts

JAKARTA (JP): PT Riau Andalan Pulp & Paper (Riaupulp) is
selling its nonproductive assets to repay its bonds and other
long-term debts, according to a company senior executive.

W. Michael Verge, the company's director of finance, said some
of the assets had been sold, including a 135-megawatt power
generator worth US$266 million.

"The power plant has been sold to PT Riau Prima Energi," he
said, adding that the company's a $141-million chemical plant
would be sold to PT Inti Indorayon Utama (IIU).

He said the other assets such as hotels and property were also
for sale.

Riaupulp, a pulp producer based in Riau province, planned to
pay the bonds issued by its subsidiary Rapp International Finance
at 101 basis points over treasuries.

The bond holders previously objected to the plan, saying it
would cause them millions of dollars in losses, as the bonds were
sold at 105 on the market.

Verge said it has been agreed in the obligation contract that
the company can pay its bonds at 101 basis points as long as its
asset selling exceeded 25 percent.

"Everything we did is legal," he was quoted by the daily
Bisnis Indonesia as saying over the weekend.

Verge said Riaupulp, 98 percent of which is owned by
publicly listed Asia Pacific Resources International Holdings,
must also protect its shareholders and not just the bond holders.
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