24 September 2001 00:00 [Source: ACN]
Goldman Sachs and Petronas are in preliminary discussions to take over Chandra Asri's US$723.6m Japanese debt, a source close to the Indonesian Bank Restructuring Agency (Ibra) told ACN.
An agreement is expected to be reached with one of the two potential investors by mid-October, before Indonesian President Megawati's scheduled visit to Japan, the source said. Goldman Sachs and Petronas were not available for comment.
'The resolution of Chandra Asri's debt problem is a priority issue for President Megawati, so Ibra has been told to step up its efforts to reach an agreement,' the source added.
According to the source, Goldman Sachs and Petronas have each offered to convert US$100m of the debt into 20% equity to start with. 'There is a possibility that the potential investor may agree to later convert a bigger portion of the debt into equity,' the source said.
In the case of Petronas, there is even a possibility that it may at a later stage look at taking over a portion of Ibra's domestic debt of US$463.6m in return for equity, the source added.
'The reason why Ibra is looking seriously at these two potential investors is because they appear willing to inject more capital into Chandra Asri. Marubeni, Chandra Asri's largest creditor, has been refusing to do that,' the source said.
However, a source in Marubeni, Chandra Asri's largest creditor, told ACN it was not willing to sell its debt 'under any circumstances', as it expects to benefit from its investment in Chandra Asri in the future.
The Japanese trading major has also not received any proposal from Goldman Sachs or Petronas about their interest in buying the Japanese portion of Chandra Asri's debt, the source said. 'These two investors may have approached Ibra, but we have not been informed about it,' the source added.
Marubeni hopes to reach an agreement in the next three weeks on the currently deadlocked debt-restructuring plan which it approved in May, the Marubeni source said.
Under the terms of the May debt-restructuring plan, Ibra was to swap all but US$50m out of Chandra Asri's total domestic debt of US$463.6m for a 31% stake in Chandra Asri. Marubeni was to convert US$100m of its loan into 20% equity. Former Chandra Asri founder and head Prajogo Pangestu would hold the remaining 49%.
Chandra Asri would also repay the debt it owes Marubeni over 15 years at an interest rate of 1.5% above the London Interbank Offer Rate. However, Ibra criticised this plan, demanding that Marubeni should convert a bigger portion of its loan into equity.
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