United Tractors to pay debt by 2010

United Tractors to pay debt by 2010

JAKARTA: PT United Tractors, controlled by Indonesia's top auto distributor, plans to settle its entire US$96 million of debt, becoming free to garner funds for expansion.

The company will have no debt latest by 2010 under an amended repayment agreement to be signed with creditors this month, Finance Director Buntoro Muljono said. Under the accord, United Tractors will repay $10.2 million of debt in December 2006 and $15 million in June 2007, he told investors and reporters in Jakarta. The remainder will be paid in June 2008, with an option to extend it to 2010.

Jakarta-based United Tractors used money from selling two units earlier this year to cut its debt from $267 million as of January.

Creditor agreements prevent it from expanding and paying dividend until the company cuts its debt by half. The company plans to distribute a mid-year dividend of Rp 20 (0.2 U.S. cent) a share on Dec. 17, its first payout in seven years. -- Bloomberg