Tjiwi Kimia to pay interest late

Tjiwi Kimia to pay interest late

JAKARTA (Dow Jones): PT Pabrik Kertas Tjiwi Kimia, a unit of financially troubled Asia Pulp & Paper Co. (APP), will make a late interest payment to its rupiah bondholders June 5, the company said Thursday.

"We will make the payment on June 5," said Yan Partawidjaya, spokesman of Asia Pulp & Paper, after a meeting with Tjiwi Kimia's bondholders.

Last month, Tjiwi Kimia missed a Rp 8.9 billion (US$800,000) payment on its Rp 200 billion bond, due to financial problems besetting its Singapore-based parent APP.

APP's international creditors, which had called a debt moratorium on its $13 billion in borrowings earlier this year, are concerned that Thursday's decision to pay interest to the rupiah bondholders will make it more difficult for them to get their money back.

Tjiwi Kimia met Thursday with local bondholders, who also asked the company to repay the remaining bonds on time in November this year.

"This is a difficult request," Yan said, referring to the company's poor financial position.

He didn't give any figures, however.