Tjiwi to make $13.25m bond payment

Tjiwi to make $13.25m bond payment

JAKARTA (Reuters): PT Tjiwi Kimia Tbk, an Indonesian unit of
Asia Pulp and Paper (APP), said on Monday it will make a delayed
$13.25-million coupon payment on its $600 million of bonds due in
2004 within 30 days from Feb. 1.

"The company will pay the coupon...within 30 days after it
matured on February 1," corporate secretary Gunawan Taslim said
in a statement to the stock exchange on Monday.

Last week APP said Tjiwi made a delayed interest payment of
$30 million on $200 million bonds due in August this year.

Troubled APP, a New York-listed, Singapore-based holding firm
for extensive regional forest products operations, is under heavy
pressure to restructure a huge portion of its near $11 billion
debt.

Tjiwi's failure to make timely coupon payments on the bonds
had triggered concern over more defaults by APP and other
companies within the group and had prompted credit agencies to
downgrade their credit ratings.

Analysts have warned the group is experiencing serious
liquidity problems and is likely to default on its huge debt
payments.

It has nearly $2 billion in notes, coupon payments and bank
loans falling due this year, analysts said.

A weak pulp and paper industry has also impacted the company's
operations.

Analysts have warned the restructuring process of the huge and
complex debts of the APP group would be slow and would drag on
for years.

APP is controlled by the Sinar Mas Group, Indonesia's second
largest conglomerate, owned by the Widjaja family.

Sinar Mas also owes the Indonesian government $1.3 billion and
has been ordered to pledge assets to cover the loans.