20 September 1999 00:00 [Source: ACN]
Creditors of Polysindo Eka Perkasa have raised doubts about the ability of the polyester producer to meet its future cash flow targets.
Polysindo spokesman Joydeep Mazumdar said creditors were concerned about the impact of Jakarta's mounting political crisis, and the impact on the country's business climate.
'Polysindo and its major bondholders had been making good progress on the debt restructuring talks. But now, we are unable to agree on the future cash flow of the company,' he told ACN. 'One had a sense of certainty before, but the process is likely to be put back now.'
The company had earlier planned to announce its debt restructuring plan by end-August (ACN 23 Aug, p4). It had earlier also faced delays as a result of legal formalities relating to the US Treasury (ACN 13 Sept, p5).
Polysindo plans to sign an MoU with its creditors on the restructuring of its US$685m offshore bonds only at end-September. Its major creditors include Credit Suisse First Boston (CSFB).
One industry source said CSFB's distressed debt management team may have accumulated bond holdings exceeding US$100m.
Polysindo first defaulted on payment of interest and principal on its debt in H1 1998. In August, the company held talks with an Indonesian state bank to restructure US$200m of its US$715m domestic debt.
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