State aircraft manufacturer PT Dirgantara Indonesia (PT DI) is seeking restructure debts related to loans obtained under the Investment Account Fund (RDI) and Subsidiary Loan Agreement (SLA).
RDI is a loan facility provided by the government to state firms using funds from foreign aid or loans, whereas SLA is a loan facility from the government using funds from state banks.
PT DI president director Budiman Sales told reporters Friday its unpaid debts under the SLA and RDI facilities totaled Rp 1.6 trillion (US169,7 million).
"We are ready to pay SLA directly, because the amount is smaller rather than RDI," Budiman said.
He said the company would propose that the government convert the debt to equity in the already 100-percent state owned company.
Besides PT DI, the office of the state ministry for state enterprises listed 44 other SOEs currently defaulting on paying debts under the RDI and SLA facilities. The government has so far facilitated the restructuring of Rp 10 trillion out of Rp 15 trillion of bad debts owed by 26 state firms.
The Rp 15 trillion of bad debts was part of Rp 49.79 trillion of outstanding debt under the government RDI and SLA facilities.
The office targets to settle these unsettled loans by 2011.
A government assessment of the facilities says the lack of feasibility studies in loan disbursement was the reason for the high default rates of the defaulting state firms.
Regardless of striving to restructure its debts, PT DI continues to expand its business by signing more contracts for aircraft and helicopter purchases with both domestic and foreign buyers.
On Friday, the company secured a new contract, providing three CB235-200 aircraft, configured for their maritime patrol version for the Indonesia navy, with the contract valued at $80 million in total.
"The aircraft will be finished in the next 24 months after the signing of this contract," Budi said.
He said that the three aircraft were part of a first batch of six planes which ordered by the navy for its 2010-2014 strategic plan.
"The navy actually needs 16 new aircraft by 2014." Budi said, adding that the budget allocated by the Defense Ministry was not enough to purchase 10 more planes.
Besides meeting domestic demand, PT DI also received orders from foreign buyers including Thailand, the Philippines, Brunei Darussalam, the United Arab Emirates and South Korea to produce CN-235 aircraft.
