The state enterprises minister urged petrochemical refiner Trans Pacific Petrochemical Indotama to pay its mounting debt to state oil and gas company Pertamina without delay, as per JakartaPost. In the event of TPPI failing to pay the debt on time, Pertamina’s performance is expected to be disrupted. A term sheet was signed on May 9 for a debt restructuring between creditors and Tuban Petrochemical Industries, which owns a majority stake in TPPI. As per the term sheet, TPPI owed a total of Rp 9.5 trillion (US$1.1 bln) to a number of Indonesian entities, including Pertamina and the upstream oil and gas regulator, BPMigas. TPPI must pay a portion of its debt by Aug. 15.
US$548 mln is owed to Pertamina, which also controls a 155 stake in TPPI, for its failure to supply middle distillate oil products to Pertamina in 2008. The May 9 term sheet states that US$300 mln in debts must be paid to Pertamina on Aug. 15, while the remainder of the debt would be paid using supply of liquid petroleum gas over 10 years. Possibility of a debt-to-share swap has been ruled out as Pertamina is not interested in an ailing company.
Apart from its debt to Indonesian entities, Antara reported that TPPI owed US$189 mln, excluding interest, to JGC Corporation, a Japan-based engineering and construction company.
The debt was a leftover from work that JGC performed on TPPI’s oil refinery and petrochemical plant, beginning in 1996. The project was supposed to be completed in 1998 but was delayed until 2004 because of the Asian financial crisis. TPPI’s debt to JGC includes maintenance during the six-year delay. Despite reports of TPPI obtaining a US$1 bln loan from Deutsche Bank to finance its debt payment, disbursement of the loan had is awaited.
08-Aug-11 
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