Gov?t agrees to restructure PLN?s debt

The government has agreed to restructure the Rp. 34.07 trillion rupiah (US$ = Rp. 11, 400) debt of the state electricity company PLN, Finance Minister Rizal Ramli said Wednesday.

"The restructuring (of PLN's debt) has been agreed for implementation," Ramli told journalists after a limited cabinet meeting on the economy at the vice presidential office.

He said PLN has been suffering financial difficulties because of past inefficiency and its huge debt burden.

The government, he said, as agreed to turn PLN's principal debt of 5.3 trillion rupiah into a new 20 year loan carrying a grace period of two years and an administration cost of four percent a year.

PLN's owed interest and fines, totalling 28.8 trillion rupiah will be turned into government equity in the company.

Ramli said a revaluation of the company's assets would be conducted as soon as possible but he gave no date.

"PLN is asked to improve the efficiency of its operations and management," he added. (*)