Wicaksana gets $15 million debt haircut
Wicaksana gets $15 million debt haircut
JAKARTA (JP): Listed trading and distribution company PT
Wicaksana Overseas International has managed to get some US$15
million in an overall debt haircut from its creditors after it
signed a US$130 million debt restructuring agreement here on
Friday.
"The restructuring deal includes a debt repurchase program,
where the company will only pay 50 percent of the $27 million
portion of the total loan," said Parveen Gandhi of Indo-Sing
Business Advisory Pte. Ltd., a debt restructuring consultancy.
Another $55 million of the company's total debt will be
rescheduled for a period of five years.
The company will repay $55 million in a lump sum by the end of
the fifth year, starting from now, said Gandhi.
A $15 million portion of the total debt will be fully repaid
after the yearly payment installments which will last for five
years.
The company said it would pay $1.54 million in cash up front
to one of the creditors that agreed to provide a five-year
maturity bank guarantee amounting to $2.31 million.
The bank guarantee will be used by the company to support its
day-to-day operations.
The company will have the $5.25 million loan portion
transformed into five-year convertible bonds with a fixed
interest rate of 6.5 percent per year.
This bond issuance is subject to the shareholders' approval at
a planned meeting on May 17.
The company also promised to divest some of its noncore
subsidiaries, worth $14 million, and sell all its idle fixed
assets, valued at $3 million.
The remaining $9.35 million, the company said, would be
converted into common shares through a rights issue slated to be
held within the next 6 months.
If the existing shareholders did not exercise their rights
share options, the creditors would take them by using the debt to
equity format, according to Gandhi.
Gandhi said the debt restructuring agreement, which involved a
$15 million principal payout as well as an interest payment
haircut, would be effective from May 22, after the company held
its shareholders' meeting.
"The company has pledged all its company's assets as part of
the prerequisite of this debt restructuring," Gandhi said after
the signing ceremony, which was attended by creditors and head of
the Jakarta Initiative Task Force (JITF) Barcelius Ruru.
The company has debts with 21 foreign, joint venture and local
creditors.
Its net profit last year stood at Rp 99 billion on net sales
of Rp 2.6 trillion, compared to minus Rp 517 billion and Rp 1.8
trillion, respectively, the previous year.
The company attributed the net loss in 1998 to huge foreign
exchange losses.
He said that with the applied assumptions in the debt
restructuring agreement, which includes a sales growth of 25
percent, the company would only be able to tolerate a rupiah-U.S.
dollar exchange rate up to 9,375.
A higher exchange rate would impede the company's ability to
service its dollar debts.
Head of JITF Barcelius Ruru said the success of Wicaksana
Overseas' debt restructuring would inspire others to follow suit.
He said JITF was now handling $7.6 billion worth of debts to
restructured, $3 billion of which would be completed in June.
He said one of the companies involved in the above $3 billion
was PT Riau Pulp.
The government established JITF in early 1998 to facilitate
the restructuring of the country's corporate debts, including the
large amount of overseas debts.
Indonesia's private sector overseas borrowing totals about $70
billion. (udi)