Widjaja family said buying APP debt

Widjaja family said buying APP debt

A senior member of the Indonesian family that controls Asia Pulp & Paper Co., the largest corporate defaulter in emerging markets history, has admitted family companies have been buying APP's distressed bonds, the Financial Times reports in an article on its Web site.

The article says that in an interview with the Financial Times on Thursday, a member of the Widjaja family intimately involved in negotiations with creditors said companies from the family's Sinar Mas group had been buying APP bonds since the pulp and paper group's March 2001 default on US$13.9 billion in debt.

The moves, insisted the family member, who asked not to be identified, were "commercial" and fell within legal restrictions on related-party transactions.

They weren't, the family member told the FT, intended to manipulate any restructuring of APP's debts as creditors have alleged.

The APP group itself, he said, had never bought its own bonds.

Three years ago, the Singapore-based APP defaulted on its huge debts, and restructuring talks have been underway ever since.

Early this year, APP signed an initial restructuring agreement for its huge $6.7 billion debts owed by the company's four Indonesian units: PT Indah Kiat Pulp & Paper, PT Tjiwi Kimia, PT Pindodeli Pulp & Paper and PT Lontar Papyrus Pulp & Paper Industries. -- Dow Jones