Indonesia debt meeting ends in NY,talk of progress
Thursday April 16, 8:49 pm Eastern Time
NEW YORK, April 16 (Reuters) - Indonesian officials and foreign lenders ended preliminary talks here on Thursday saying progress had been made toward easing Indonesia's corporate debt burden and agreeing to reconvene next month.
A joint statement issued after the two-day meeting at Chase Manhattan headquarters characterized the discussions as ''constructive and positive,'' and Indonesia's chief negotiator told Reuters he was ''very happy and very encouraged'' by the talks.
Indonesia and the banks agreed to a set of principles, inspired by Mexico's Ficorca program of the early 1980s, ensuring any deal would protect debtors from foreign exchange risk and guarantee lenders and borrowers foreign exchange access to service restructured debt, the statement said.
Mexico's program allowed firms to repay foreign debt in pesos to Ficorca, which then paid foreign creditors in dollars. The Mexican government technically did not assume the loans, only the foreign exchange losses, after the peso fell 80 percent in 1982.
Both parties acknowledged the process remained in its infancy. Bankers said they want proof Indonesia is complying with terms of its recent agreement with the International Monetary Fund (IMF) before they will sign off on any plan.
''We would insist that they are in compliance with the IMF program before we agree to any debt restructuring,'' one banking source close to the proceedings said.
Before developing specific terms of restructuring, lenders said they wanted a more thorough examination of the country's economic health and a breakdown of the corporations' debt loads.
The request for detailed information posed a challenge for the Indonesians, Prawiro said.
''We must go back and come up with all the data they have asked for,'' Prawiro said when asked what roadblocks the negotiators must clear.
He asserted Indonesia had been ''flexible'' in the talks and estimated a program would be enacted by the second half of this year.
The meeting -- labeled ''preliminary'' from the beginning -- was aimed at developing a restructuring plan for the $74 billion or more of foreign debt owed by Indonesian corporations. Many of the companies have been unable to meet debt payments since the local currency, the rupiah, collapsed last year.
Discussions moved to New York for the past two days from Singapore. Negotiators plan to meet again in early May, but they said a location for that gathering has not been set.
Thirteen institutions, led by co-chairs Bank of Tokyo-Mitsubishi, Chase Manhattan Corp and Deutsche Morgan Grenfell, comprise the bank steering committee. The others are Bank of America, Citibank, HSBC Holdings, Sanwa Bank, Sumitomo Bank, ABN AMRO, Standard Chartered,
Korean Development Bank, Overseas China Bank Corp, and Banque Nationale de Paris. |
