Steady Safe to settle debts before April

JAKARTA (JP): Transportation company PT Steady Safe announced on Monday that it would settle its US$265 million debt with the liquidator of Peregrine Fixed Income Limited (PFIL) before April.

"Steady Safe and the liquidators of PFIL have agreed in principle on how to settle the debt," Steady Safe vice president Shadik Wahono said during the company's public expose at the Jakarta Stock Exchange office.

He said the debt settlement would be conducted through an ownership transfer of Steady Safe assets to the liquidator or through a cash payment, which would be provided by the prospective new investors interested in Steady Safe equity.

Steady Safe, which operates metered taxis and a public bus service, used the financing facility of PFIL in 1997 to enter a passenger ferry business and invest in toll road operator Citra Marga Nusaphala Persada.

The provision was originally given as a bridging loan which was to be repaid when Steady Safe completed its plan to issue rights shares on the Jakarta Stock Exchange and bonds in foreign markets.

The bridging loan amounted to $150 million, and was on top of another PFIL loan amounting to $100 million for the refinancing of Steady Safe's syndicated debts. The total debt outstanding was then $250 million.

But then Steady Safe defaulted on the loan, sending PFIL into bankruptcy and liquidation in January 1998. PricewaterhouseCoopers-Hong Kong was appointed by the court as PFIL's liquidator.

Shadik said the Hong Kong-based liquidator was currently doing a due diligence process for the valuation of Steady Safe assets.

The liquidator also needed to identify which assets of Steady Safe were acquired or financed using PFIL funds, Shadik said.

"Various Steady Safe assets which were acquired using PFIL funds shall be transferred to PFIL in exchange for Steady Safe outstanding debts," he said.

Shadik said if the above plan is fulfilled, Steady Safe would have a substantial book gain on its balance sheet, thus freeing the company from negative equity.

Steady Safe is facing a risk of being delisted because of the "disclaimer" opinion of the independent auditor due to the company's huge negative equity.

Steady Safe, with total assets of Rp 877 billion ($122 million), recorded a negative equity of Rp 1.35 trillion at the end of 1999. This compares to total assets of Rp 926 billion and an equity of minus Rp 1.57 trillion the previous year. (udi)