Texmaco may fail to get $60m loan from Bank Mandiri

Texmaco may fail to get $60m loan from Bank Mandiri

JAKARTA (JP): The applications made by four Texmaco Group
companies for some US$60 million in new loan facilities from
state-owned Bank Mandiri may not be approved due to the "senior
lender" status demanded by the bank as a precondition.

Chairman of the Indonesian Bank Restructuring Agency (IBRA)
Edwin Gerungan said on Wednesday that other creditors of the
Texmaco companies might oppose the Bank Mandiri demand.

"Many other lenders (creditors) will object (to the senior
lender status demand)," Edwin told reporters prior to a meeting
with legislators.

Separately, Bank Mandiri president E.C.W. Neloe said on
Wednesday that without the senior lender status, the bank would
not lend its money to the Texmaco companies.

"Unless we obtain senior lender status, we'll not lend our
money. It's as simple as that," Neloe said.

In a working session with the House of Representatives'
Commission IX on the state budget and finance on Tuesday, Neloe
confirmed that four Texmaco companies had sought loans from Bank
Mandiri last year amounting to some $60 million to finance the
procurement of materials and components for buses and trucks
ordered by the government for military and civilian uses.

Texmaco is an integrated textile and engineering conglomerate.
The four companies seeking the loans were PT Wahana Perkasa Auto
Jaya, PT Perkasa Heavyndo Engineering, PT Texmaco Perkasa
Engineering and PT Perkasa Indobaja.

Neloe also told legislators that Texmaco must first
restructure its debt to IBRA before the bank would agree to
extend any such new loans to the group.

Texmaco owes around Rp 19 trillion to IBRA. The massive debt
were initially owed to local banks but was transferred to IBRA
after it turned sour.

However, it is not clear whether IBRA is also a creditor of
the four companies.

Last year, Coordinating Minister for the Economy Rizal Ramli
approved the restructuring of the Texmaco debt, but the deal
attracted strong criticism from various quarters, including the
International Monetary Fund and the World Bank.

Texmaco has yet to sign the final restructuring deal with
IBRA.

But Edwin said that some of the Texmaco debt had not yet been
restructured.

Texmaco was hit by controversy in November, 1999 after a
minister alleged that the group had used its political
connections to force the state-owned Bank Negara Indonesia (BNI)
to provide it with massive loans.

Elsewhere, Neloe said that the four Texmaco companies had been
exporting their products to General Electric, Siemens, Hitachi,
Koebe, Phillips Petroleum and many other customers.

Neloe, however, said that there was still idle capacity which
could be utilized to increase production and provide more
employment if the companies obtained working capital loans. (rei)