PLN to pay Rp 2.2 trillion of bonds
Monday, October 30 2000 - 04:00 AM WIB
State electricity company PT PLN is committed to paying interests and principals of its Rp 2.2 trillion bonds when they come due, according to PLN corporate secretary Murtaqi Syamsudin.
Murtaqi said in his letter to the chairman of the Indonesian Capital Market Supervisory Agency (Bapepam), dated Oct. 20, 2000, with a copy sent to the management of the Jakarta Stock Exchange, that PLN would honor its obligations to the bondholder despite its financial limitations.
"Although PLN is currently facing critical problems, PLN will maintain its commitment to prioritizing the payment of interest and principals of its bonds according to their due dates," he said in the latter.
Murtaqi noted that the decision to prioritize the payment of PLN due bonds was decided by PLN board of directors on its meeting on July 12, and was stated in its white book on how to handle PLN critical problems, that was presented to the House of Representatives' Commission VIII at a hearing on Oct. 18.
In the white book, it was stated that one of important issues that would need immediate actions from the government was PLN's financial balance that needed to be restructured soon. It was stated that PLN had an unbearable debt burden.
As of June 30, 2000, PLN debt reached some Rp 50 trillion, including Rp 47.23 trillion debt to the government through two-step-loans, of which Rp 25.96 trillion was principal, Rp 12.77 trillion was accrued interest and Rp 8.52 trillion was penalties on accrued interest.
In addition, PLN had another Rp 426 billion in debt to state banks and Rp 2.2 trillion to its bondholders.
Currently, Murtaqi said PLN was paying its debts to state banks and to bondholders. But it had not been paying its debt to the government since Dec. 1998.
Therefore, PLN's finance needed to be restructured soon, because PLN's finance balance had shown a net negative capital of Rp 1.9 trillion as of June 30, 2000. And PLN's negative capital would increase to Rp 6 trillion by the end of this year if the government did nothing to the state electricity company's debt, especially the debt to the government. (*)