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.