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Govt steps in to settle bad debts of SOEs
The government has so far facilitated the restructuring of Rp 10 trillion (US$1
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he government has so far facilitated the restructuring of Rp 10 trillion (US$1.04 billion) of bad debt owed by state firms under the so-called investment account fund (RDI) and subsidiary loan agreement (SLA).
These debts are part of the Rp 15 trillion worth of bad debts the Office of State Minister for State Enterprises have been trying to work out.
"The debt restructuring is one of the Office's 14 priority programs. The debts belong to 26 state enterprises amounting to Rp 15 trillion, Rp 10 trillion of which has been settled or restructured," Secretary to the State Minister for State Enterprises Muhammad Said Didu told reporters on Friday evening.
The Office has been facilitating the settlement of these debts following a recent warning from the Corruption Eradication Commission (KPK) to immediately sort out and settle the state enterprise debt mess as well as prevent state losses.
The Rp 15 trillion of bad debts were part of Rp 49.79 trillion of loans under the government RDI and SLA schemes. Under these schemes, the government channeled loans, mostly derived from overseas creditors, to 85 state companies since 1971 as working capital, investment capital, and financing for state projects as instructed by government.
However, only 41 state companies returned Rp 32.32 trillion of these debts, while 44 companies had some difficulties in servicing the remaining Rp 15.48 trillion.
Commenting on the remaining Rp 5 trillion of bad debts, Said stated that the Office is finding it hard to help settle these, although it would continue to try to do so and has set a target to settle all the remaining debts by 2011.
According to Said, the remaining debts are owed by a group of companies which include financing companies PANN Multifinance, diversified group PT Rajawali Nusantara Indonesia (RNI) and shipyard company PT Dok Kodja Bahari, and PT Jakarta Lloyd.
"RNI alone has Rp 2 trillion of unsettled debts," added Said.
Previously, Said had stated that these state companies had failed to service the debts due partly to lack of feasibility studies in debt management, as well as to problems related to overlapping business and government functions, while the 1998 crisis had severely devalued the currency.
At present, the country has 141 state firms.
Last year, 114 SOEs booked a total profit of Rp 77.6 trillion while the remaining 27 SOE firms suffered Rp 13.8 trillion in losses.
During the same year, the total dividend from state companies destined to state coffers reached Rp 29.1 trillion. (naf)
