Medco restructures most of its debts

Medco Corporation, a publicly listed oil mining company, said that it has restructured 86 percent of its total foreign debts or about US$623 million through a number of schemes including a debt-to-equity swap and personal guarantees from the majority shareholders, Bisnis Indonesia reported on Friday.

The company said in a statement the restructuring of the remaining $100 million debts -- $60 million of which owed to the Indonesian Bank Restructuring Agency (IBRA) and other $40 million to non-IBRA creditors -- were being negotiated.

Medco's total debts reached $723 million in 1997, comprising of $613 million in foreign currency debt and Rp 881 billion in rupiah debt.

Medco said with the restructuring of the 86 percent of the total debts, its debt to equity ratio fell sharply to 30 percent from as high as 200 percent, giving more a leeway for the company to carry out its expansion program.

"With the success to restructure most of our debts, we can show the public that we are able to settle our debt professionally," one of the company's executives said in the press release. (*)