Wicaksana signs debt restructuring deal

JAKARTA (JP): Publicly listed trading and distribution company PT Wicaksana Overseas International has entered into a principle agreement with its creditors to restructure US$126 million in debts through debt buyback, debt-to-equity swaps and rescheduling deals.

"We signed a memorandum of understanding on the restructuring package with the steering committee of our 29 domestic and foreign creditors on Friday," Wicaksana's corporate finance manager Elys Karis said on Tuesday.

Wicaksana held a general creditors' meeting here on Tuesday to finalize the in-principle memorandum of understanding.

The steering committee is chaired by Citibank and consists of six other banks-- American Express, ANZ Panin, Fuji Bank, HSCB, ING Bank and Rabobank Duta, the company said.

Karis said Wicaksana's financial adviser, Indo-Sing Business Advisory (ISBA) of Singapore, was instrumental in bringing the deal together.

After the restructuring, which is expected to completed in the first quarter, Wicaksana will be left with a smaller and sustainable level of loan as its leverage and interest burden will be reduced to a manageable level, the company added.

"The debt-to-equity swap not only will improve and strengthen the company's capital structure, but also shows the creditors' confidence in the future of Wicaksana," said ISBA managing director Parveen Gandhi.

Gandhi said with bankers expected to become new shareholders of the company, its good reputation would further be enhanced which would greatly help Wicaksana to obtain new business and access to the capital market.

The company said the restructuring process started in February and intensified with constructive discussions and meetings since August.

It said the process was greatly helped by its honesty and transparency to its creditors, who in turn responded with a supportive attitude.

Wicaksana Overseas, a subsidiary of PT Wiracaksana holding company, distributes the products of nine multinational companies -- among them Procter & Gamble, Quaker Oats Asia, Kiwi Brands, Osram Indonesia and Effem Foods -- and nine national manufacturing firms, including Indofood Prima, Bintang Toedjo, Karomatul Amal Ummat, Sumbermas Langgeng Confectionary and Tirta Sapta Jaya.