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| Mandiri Sets Restructuring On Bosowa's Debt |
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Jakarta Post, 26 September 2008, JAKARTA. Bosowa reach deal on debt restructuring with Bank Mandiri State-controlled Bank Mandiri, the nations largest lender, signed an agreement with South Sulawesi-based cement maker PT Semen Bosowa on Thursday to restructure its Rp 1.7 trillion (US$183.6 million) debt to the bank. The deal has not only eased the bad loan of the publicly listed Bank Mandiri, but has also provided leverage for Bosowa, which is controlled by tycoon Aksa Mahmud, Vice President Jusuf Kallas brother-in-law and now close confidant. "We have decided to restructure the debt because Bosowas cement business is deemed prospective," said Bank Mandiri managing director for special asset management, Abdul Rachman. Under the deal, he said, Bank Mandiri would prioritize the payment on the loan principal amounting to Rp 526 billion until 2012 with an interest rate of 12 percent per annum. As for the remaining Rp 1.2 trillion, which include penalties and currency depreciationcosts, Bosowa will start making installments starting in 2013 until 2015. Should Bosowa fail to pay within the schedule, Bank Mandiri has the right to take 30 percent of the companys stake. Bosowa is also required to pay 10 percent per year of the total penalty since the loan was disbursed.
Bosowa's parent, Bosowa Group, secured loans worth Rp 526.3 billion in 1996 to build its 1.8 million-ton cement plant in South Sulawesi. However, after the 1997 Asian financial crisis, the loans ballooned by 25.0 percent to Rp 1.7 trillion following the steep depreciation of the rupiah against the U.S. dollar, sending the Group into default. The loan was disbursed by a syndication of three state banks with Bank Mandiri held the biggest portion of 60 percent, while Bank Negara Indonesia 36 percent and Bank Tabungan Negara 4 percent. BNI, the countrys third largest lender, signed an agreement in August to resolve its Rp 584 billion debt tox the bank, extending the maturity period of the loan until 2015 and impose market-based interest rates. With the debt fiasco settled, Bosowa president director Erwin Aksa said the company expected to sell some of the companys shares via an initial public offering (IPO) scheme during the half semester of 2009. Proceeds from the IPO would be used to pay the debts and expand its plant capacity by 2 million tons. He said a number of foreign cement producers - Thailands Siam, France-based Lavarge and Malaysias YTL - had showed interest in participating in the cement plant project. "We are still negotiating with them," said Erwin, who is also the chairman of the Young Indonesian Entrepreneurs Association (HIPMI). Bosowa, an acronym of three regencies in South Sulawesi; Bone-Soppeng-Wajo, formed its roots back in the 1970s as the sole distributor of Mitsubishi vehicles. |
