Jasindo gets $3 million fee from Medco

State owned PT Asuransi Jasa Indonesia (Jasindo) received a guarantee fee of US$3 million from the issuance of short-term bonds by PT Rekasarana Utama and Group to Medco Corporation, the insurance company's president Amiruddin Riayat was quoted by Bisnis Indonesia as saying.

Amiruddin denied the press reports that the state insurance company suffered losses from the transactions, which had caused the company in trouble after Medco failed to settle the payment of the bond yields in 1999.

The Attorney General Office under the previous government charged Medco boss Arifin Panigoro with inflicting massive losses to the state after his company failed to settle its debts.

Amirruddin said that proceeds from the issuance of the $227 million bonds issued by Rekasarana, a company owned by Jasindo employees, were used by Medco to expand its operation. But Medco could not settle the debt due to the crisis, which had caused the collapse of the rupiah against the U.S. dollar in 1999.

According to Amiruddin, bondholders had agreed to swap the bonds with 30 percent of Medco shares under a debt restructuring agreement recently signed by Medco and the bondholders.

"We received a guarantee fee of about $3 million from PT Rekasarana. We did not suffer losses at all from the transaction," he said. (*)