Sinar Mas offers Rp 23.10t in fixed asset collateral to IBRA

Sinar Mas offers Rp 23.10t in fixed asset collateral to IBRA

JAKARTA (AFX-ASIA): The Sinar Mas Group has offered the
Indonesian Bank Restructuring Agency (IBRA) fixed-asset
collateral valued at Rp 23.10 trillion (about US$2.3 billion) as
part of the group's effort to settle affiliated loans provided by
former subsidiary Bank Internasional Indonesia.

According to an appraisal document dated March 8, 2001
obtained by AFX-ASIA, the plant and equipment under PT Indah Kiat
Pulp & Paper, PT Pabrik Kertas Tjiwi Kimia, PT Pindo Deli Pulp &
Paper Mills I and II, PT Lontar Papyrus Pulp & Paper Industry and
PT Purinusa Ekapersda have been offered to IBRA as collateral.

The appraisal, conducted by PT Actual Kencana Appraisal,
valued all the fixed assets owned by the five subsidiaries of
Asia Pulp & Paper Co Ltd at Rp 23. 10 trillion for.

Fixed assets of Indah Kiat were valued at Rp 7.5 trillion,
those of Tjiwi Kimia at Rp 8.65 trillion, Pindo Deli at Rp 6.71
trillion, Lontar Papyrus at Rp 21.646 billion, and Purinusa
Ekapersada at Rp 204.25 billion.

Sinar Mas and IBRA signed an agreement on Jan 26, 2001
stipulating that Sinar Mas will repay its US$1.24 billion debt to
PT Bank Internasional Indonesia in seven installments, with the
last payment of 65 pct of the total to be made in Sept 2003.

The agreement also requires Sinar Mas to pledge collateral to
the value of at least 145 percent of the $1.24 billion debts to
IBRA, after an independent appraisal company is appointed by
Sinar Mas and approved by IBRA.

An IBRA source said that other existing creditors and
bondholders of the above companies whose fixed assets were to be
pledged to IBRA have not been asked for their consent over the
planned pledging.

Bank Internasional Indonesia -- formerly Sinar Mas' financing
arm -- is now majority-owned by IBRA after the bank went through
a government-sponsored bank recapitalization program in 1999.

The IBRA source said IBRA will also receive equity shares from
Sinar Mas group companies besides the fixed assets of
subsidiaries within Asia Pulp & Paper Co Ltd.

The source said Sinar Mas has offered 1.454 billion shares the
group holds in PT Indah Kiat, 560.280 million shares in PT Tjiwi
Kimia, 826.785 million shares in PT Duta Pertiwi and 63.843
million in PT Smart.

He added that for shares in the non-listed companies, Sinar
Mas has also offered the group's 35 percent stake in PT Indomilk,
and an unspecified percentage of shares in PT Pindo Deli Pulp, PT
Bumi Serpong Damai, and PT Henkel Indonesia.

The source said Sinar Mas and IBRA may enter a stand-still
agreement this week, to allow both parties -- for a predetermined
length of time -- to finalize the complete debt restructuring
agreement.