Some $10 billion in corporate debts restructured: Rizal

Some $10 billion in corporate debts restructured: Rizal

JAKARTA (JP): Coordinating Minister for Economic Affairs Rizal
Ramli estimated on Friday that some US$10 billion in corporate
overseas debt had been restructured outside the mediation of the
Jakarta Initiative Task Force (JITF).

Rizal said that he had asked the finance ministry, the
Indonesian Bank Restructuring Agency (IBRA) and Bank Indonesia to
compile the data and consolidate it into the total amount of
corporate overseas debts that have been restructured.

"There are some corporate overseas debts that have been
restructured outside JITF," he told reporters on the sidelines of
the 14th congress of the National Private Banks Association
(Perbanas).

Rizal explained that the debts which had been restructured
outside the JITF mediation process were those owed by local joint
venture operations of multinationals, particularly Japanese
firms.

"If we consolidate this, I'm sure there is quite a lot of
corporate debts which have been restructured. And if this figure
can be announced, it will help improve our credit rating," he
said.

He said that he planned to go to New York at the end of
September to meet foreign investors and credit rating agencies to
inform them about the latest developments in the economy and
corporate debt restructuring.

He said that he would also ask the rating agencies to come to
Indonesia in the middle of October to make a "technical review."

Restructuring the country's $70-odd billion corporate overseas
debts has been one of the core economic programs of the
government to help revive investor confidence.

The government launched JITF to provide a mediation facility
between debtors and creditors to reach debt restructuring
agreements.

Some $5 billion of corporate overseas debts have been
restructured via JITF. The task force expects to help
restructure another $3-5 billion by the end of this year.

The strategic objective is to restructure a total of $12
billion debt by April 2001.

Elsewhere, Rizal said that the government was planning to
retender several infrastructure projects including the stalled
subway project in Jakarta, the double-track railway project
linking East Java and Jakarta, and the ferry system in
Kalimantan.

"The projects will not be financed through state budget, but
equity-based financing," he said.

"It is impossible to rely only on the budget and on loans and
have an economic recovery, it must be an equity-based recovery,"
he added.

He said that the policy of the new economic team was to
finance the development of infrastructure projects through
equity-based financing instead of loan-based financing, although
many infrastructure projects in the country were actually
bankable and economically feasible.

He said that in the past many were not bankable because the
cost had been marked up to accommodate the issuance of "unpaid
shares" to the family and cronies of former president Soeharto
giving them shares in the project without having to inject any
cash or capital.

He stressed that such "unpaid shares" did not exist under the
new government.

He pointed out as an example that the retender of an airport
project in Surabaya, East Java, had enabled the government to
reduce the cost of the project by $500 million.

Rizal also said that there was already some excitement among
foreign investors to resume investing in Indonesia.

He pointed out that he had been talking with a group of German
investors who wished to start developing a toll road project
linking a German center in West Jakarta, and to invest in coal
mining in Ombilin, South Sumatra.

"The economic train is now moving and will soon move fast. If
you continue to be pessimistic you'll be left behind," he said.
(rei)