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Technology Stocks : INDONESIA'S PT TELECOM(TLK) -- Ignore unavailable to you. Want to Upgrade?

To: Duke who wrote (266)	2/6/1998 6:35:00 AM
From: Rational	Read Replies (1) \| Respond to of 947

JAKARTA, Feb 6 (Reuters) - Indonesia said on Friday it was working on a new bankruptcy law, a key issue in dealing with the country's crippling corporate debt, and put its total foreign indebtedness at $137.4 billion. Radius Prawiro, appointed by President Suharto to oversee the foreign debt crisis, told a later news conference 42 domestic companies that had received $1.0 billion in loans from the International Finance Corporation (IFC) and other banks had no problems in servicing this debt. The companies include state-controlled telecommunications giant PT Telkom. The IFC provided $500 million, with the balance from participating banks that an official statement issued before the news conference did not name. The statement said the government was moving swiftly to set up a new bankruptcy law as part of sweeping economic reforms agreed with the International Monetary Fund (IMF) in return for a $43 billion bail-out. The lack of such a law has been a key issue in investor confidence after the plunge in the rupiah currency since last July had technically bankrupted many companies unable to service or pay off their foreign debt. ''Companies which are unable to service their debt within the framework set by the debt negotiating team will have to settle their debt through the legal route,'' the statement said. ''In this context, the Indonesian government will produce as soon as possible a bankruptcy law,'' it said. ''This should help restore some confidence among foreign investors, depending on what is in the law and how quickly it is enacted,'' one economic analyst said. The statement, released following a meeting between Suharto and his top economic advisory committee, said the latest figures put the country's overall foreign debt at $137.424 billion, of which total corporate foreign debt accounted for $73.962 billion. Of the corporate debt, $30.52 billion was owed by joint venture companies. The statement reiterated that the government would not bail out indebted private companies. ''There will be no guarantee, no bail-out and no government involvement in the corporate debt,'' it said. Prawiro, who was recently in Japan to talk to government and banking officials, said Bank of Tokyo-Mitsubishi and Sanwa Bank Ltd were representing Japanese creditor interests on a Steering Committee of international banks to help deal with the debt situation. Banking sources said other banks on the committee included Britain's Standard-Chartered Bank, Union Bank of Switzerland, ABN-AMRO of the Netherlands, Citibank and Bank of America for the United States, Deutsche Bank for Germany, Societe Generale for France, and Development Bank of Singapore and United Overseas Bank for Singapore. Indonesia was also setting up a Contact Committee of debtors to facilitate debt restructuring. A Western banking source said joint venture debt should be easier to handle, with foreign banks in a number of cases backing their own national companies investing in Indonesia. ''Clearly on this joint venture issue, you're half way to a solution from day one, because you already have some trust and confidence between the parties,'' he said. ''It is much easier to talk about restructuring (debt) under these circumstances when you're in it for the long term.'' he said.