15 April 2003 10:56 [Source: ICIS news]
SINGAPORE (CNI)--The Indonesian Bank Restructuring Agency (Ibra) and Bank Negara Indonesia (BNI) has given the Texmaco Group until June to pay back $25m (Euro23.3) that it owes BNI, an Ibra official told CNI on Tuesday.
BNI has so far issued letters of credit (L/C) worth $100m to the group, which Texmaco uses to purchase raw materials. The group has so far spent $99m. However, since end-2001, the group has accumulated a total of US$25m that it has not paid back. Ibra is a guarantor for the L/Cs.
Under the terms of an agreement signed by the three parties on Monday (14 April), strict action would be taken against the group if it fails to pay back the sum owed by the June deadline. The official declined to say what this action would be.
Texmaco can still request that BNI issue more L/Cs, although the group must first pay 50% of the L/C up front, he said.
The agreement also stipulates that Ibra will continue to guarantee the L/Cs issued by BNI for the group. The agency and Texmaco will also open a joint account with which will hold the group’s sales revenue. Ibra will ensure that funds in the account are used to pay back the L/Cs.
Ibra would also monitor the cash flow between the group’s textile and engineering businesses to make sure that funds from the L/Cs are used for its textile business and not its engineering business.
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