Two foreign investors eye Chandra Asri: Govt

Two foreign investors eye Chandra Asri: Govt by Berni K Mustafa

JAKARTA (JP): Two foreign investors have expressed interest in acquiring government stakes in the financially ailing PT Chandra Asri Petrochemical Center, which could end the petrochemical giant's long and complicated debt restructuring effort.

Secretary of the Financial Sector Policy Committee (FSPC), Syafruddin A. Temenggung, said on Thursday that the government was considering selling its stake as part of the restructuring of Chandra Asri's huge debts.

"So far, we've received two bids, one from an investment bank and another from a strategic partner," Syaifruddin said.

He said the government was still seeking the best possible way to restructure Chandra Asri's debts.

The company owes some US$730 million to a consortium led by Japan's Marubeni Corp., and another $464 million to the Indonesian Bank Restructuring Agency (IBRA), which took over loans from troubled local banks in the wake of the 1997 financial crisis.

More than two years have passed without IBRA and Marubeni coming to an amiable debt restructuring deal. The two sides are unable to agree on how much of their loans should be converted into equity in Chandra Asri.

The last deal approved by the previous economic team was slashed over findings that the debt to equity ratio was advantageous to the Japanese creditors but disadvantageous to the agency.

Under the deal, IBRA would end up with a 31 percent stake in Chandra Asri, Marubeni with a 20 percent stake, while the remaining 49 percent stake would be held by company founder Prajogo Pangestu.

Critics often argue that the previous deals were the result of Marubeni's strong lobby of the government.

However, the deadlock at Chandra Asri has prompted the Japanese government to press Indonesia to speed up the company's debt restructuring deal.

Chandra Asri warned that further postponements of a deal would hurt its asset value on top of ballooning interest payments.

The committee, which is in charge of IBRA's high-profile debt deals, has been handling Chandra Asri's debt restructuring.

Committee secretary Syafruddin declined to confirm an earlier report by the Dow Jones newswire, which quoted him as saying that three investors were eying Chandra Asri.

They are U.S.-based investment firm Goldman Sachs, Malaysia's state-owned oil and gas company Petronas and British-based oil and gas company BP Plc.

He said the government could expect proceeds of between $800 million and $1 billion from the sale of its stake in Chandra Asri.

The wire quoted an IBRA source as saying the proceeds could be used to pay back the Japanese creditors in full, with the remainder going to the government.

Chandra Asri supplies raw material for the plastic, textile and chemical industries.(bkm)