Govt agrees to convert PLN debts worth Rp 32 trillion into equity

The government has agreed to convert state electricity company PLN debts totaling some Rp 32 trillion (1US$=Rp 9,500) into equity, Bisnis Indonesia reported on Wednesday quoting the company's president Kuntoro Mangkusubroto.

Kuntoro said that the debt to equity swap agreement would be formally announced after a coordinating meeting of the Cabinet on Wednesday.

He said that the debt to equity swap would be able to reduce PLN's loss to some Rp 8 trillion this year from the estimated level of over Rp 16 trillion. "I am happy, after tow years, the government finally agreed to our proposal," he added.

Kuntoro said that PLN has spent at least two years to ensure the government to swap its short-term loans into equity in a bid to reduce the company's widening financial deficit. (*)