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The
Jakarta Post, Jakarta
The
government and Japan's Marubeni Corp. have finally
agreed on a scheme to restructure US$1.2 billion
in debts owed by the PT Chandra Asri Petrochemical
Center, in a deal that could mark the end of
a two year negotiation process. Secretary of
the Financial Sector Policy Committee (FSPC),
Syafruddin Temenggung said on Thursday that
Marubeni had agreed to lower the terms imposed
on Chandra Asri's debt payment. Chandra Asri
owes the government $463.3 million and another
$723.6 million to Japanese lenders, led by Marubeni.
Under
a debt for equity swap, Marubeni agreed to convert
$147 million into a 24 percent stake in Chandra
Asri. Previously, Syafruddin said, the Japanese
firm had agreed to convert only $100 million
for a 20 percent stake. The remainder of its
debts Chandra Asri must pay at rates of 1.25
percentage points above the London Interbank
Offered Rate (Libor). This cuts 0.25 percentage
points from Marubeni's earlier demand of 1.5
percentage points above the Libor, he said.
The payment he said would be stretched over
a 15-year period.
FSPC took over Chandra Asri's debt restructuring
talks after the company was transferred as collateral
to the Indonesian Bank Restructuring Agency
(IBRA). It was formerly owned by conglomerate
Prajogo Pangestu. The committee, which groups
several senior economics ministers, is in charge
of restructuring high-profile debt cases worth
over Rp 1 trillion (about US$97.56 million).
Chandra Asri's deal may have removed a thorny
issue from Indonesia's relationship with Japan,
a large donor to the country. Past restructuring
schemes were scrapped after critics accused
the government of bowing to political pressure
from Japan.
"I don't see any pressure here, I have been
involved in the negotiation since the beginning,"
Syafruddin explained. The previous deal faced
the axe after an independent review committee
found that it was disadvantageous to IBRA. With
Marubeni then agreeing to only a 20 percent
stake, IBRA was left with a hefty 80 percent
stake for its $463.3 million. But scrapping
the deal prolonged the uncertainties that had
been plaguing the petrochemical project. On
a number of occasions, the Japanese government
urged Indonesia to wrap up Chandra Asri's debt
talks. The latest deal also comes at a time
when the government is hoping to secure more
loans in next month's meeting of the Consultative
Group on Indonesia (CGI). Japan has been one
of the largest contributors during previous
CGI meetings.
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