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