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)