Medco Group has settled debts to Jasindo

State owned PT Jasa Asuransi Indonesia (Jasindo) said that Medco has settled all its debts after the company's majority shareholders agreed to transfer part of the company's shares in a Kazakstan-based oil company, Bisnis Indonesia reported on Friday.

Jasindo's president Amiruddin said in Jakarta on Thursday that the oil company agreed to hand over 38 percent of its ownership in the Kazakstan company in exchange of its debts to PT Rekasaran, with collateral value of $300 million.

"Based on BPKP audit report, the debts have been all settled following the transfer of Medco's assets," he told members of the House of Representative in a hearing.

Several years ago Jasindo and Reksaran, a pension fund owned by Jasindo's employees bought promissory notes worth US$200 million issued by Medco Group. Reksaran then sold the bonds to a foreign buyer under the guarantee of Jasindo. The interest of the notes has reached a total of $27 million after the oil company defaulted the payment during the early years of the notes.

A House member said he did not believe if the debts owed by Medco Group to the insurance company had been settled and threatened to use the House's investigation rights to inspect the deal. (*)