Satelindo restructures $583 million debt

Satelindo restructures $583 million debt

JAKARTA (JP): PT Satelit Palapa Indonesia (Satelindo) signed
agreements on Tuesday to restructure US$583 million in debts to
more than 45 foreign and local creditors, including the
Indonesian Bank Restructuring Agency (IBRA).

The telecommunications company managed to bring its total debt
down from $750 million after paying off some debts from the
proceeds of an insurance claim from its Palapa C1 satellite.

The value of debts covered under the agreements, including the
1999 interest rate, is $192 million in term loans owed to IBRA
and French and German export credit agencies, $67 million in
letters of credit to Paribas/BBD and IBRA, $109 million in vendor
financing to Alcatel and Siemens, and $215 million in commercial
papers.

Satelindo president Abdul Kadir Assegaf signed the
agreements, the result of 18 months of negotiations, with
representatives of the creditors in a ceremony at the company's
headquarters. IBRA was represented by the deputy for assets
management credit Irwan Siregar.

"The completion of the debt restructuring is an important
milestone for Satelindo," Assegaf said.

"Completion allows Satelindo to redirect its focus on managing
its business and maintaining its position as the leading
integrated telecom company in Indonesia," he said.

Besides operating the Palapa C2 telecommunications satellite,
Satelindo also runs the second largest GSM cellular network in
Indonesia with some 800,000 subscribers.

The debt restructuring will be conducted through an initial
payment of the 1998 interest, capitalizing the 1999 interest,
converting matured notes to new notes, a rescheduling of debts
which will mature in 2006 with secured creditors being paid
earlier than unsecured creditors, and new standby credit
facilities worth $50 million provided by Alcatel and Deutsche
Telekom.

The debt to IBRA of $70.83 million consists of $65.88 million
principal debts and $4.95 million in deferred interests from
1999. The principal debts comprise $60.88 million in letters of
credit transferred from Bank Exim Indonesia, and $5 million in
commercial paper transferred from Bank Dagang Negara (BDN).

Satelindo is owned by PT Bimagraha Telekomindo (45 percent),
Deutsche Telekom Asia (25 percent), PT Telekomunikasi Indonesia
(22.5 percent) and PT Indonesian Satellite Corporation (7.5
percent). (10)