"After so long lying idle many of its components may need replacement."
Jakarta (ANTARA News) - PT Trans Pacific Petrochemical Indotama (TPPI), debt laden owner of a large petrochemical center escaped from bankruptcy demanded by one of its creditors.

The majority of creditors voted in a commercial court session on Debt Repayment Obligation Postponement favoring a debt restructuring proposed by TPPI`s new management.

"With the restructuring proposal approved by the majority of creditors, TPPI is saved from bankruptcy, its vice president Basya G Himawan said here on Tuesday.

Earlier state energy company PT Pertamina, one of the creditors and the Asset Management Company (PPA) took over the management of TPPI as the old management failed to meet its debt obligation.

Later one of its creditors demanded that TPPI was declared bankrupt, but before bankruptcy session took place other creditor Nippon Catalyst proposed Postponement of Debt Repayment Obligation, which led to majority votes favoring the debt restructuring proposal of TPPI.

Basya Himawan said 56 creditors took part in the session on Tuesday and only two of them against the proposal.

Among the points in the debt restructuring agreement is that creditors, holding no collateral become shareholders of TPPI.

With the agreement, the new management will seek to immediately put in operation its oil refinery, Basya said.

"I hope in two to three months the refinery will resume operation and in nine months it is expected to operate in full gear," he said.

The factory has lying idle since Dec. 2011 as Pertamina has stopped supplying its with the basic material.

"After so long lying idle many of its components may need replacement," Basya said.

TPPI will earn income with the operation of the refinery, he said, adding for one year the company has recorded only spending with no income.

Earlier it was reported TPPI had a debt of US$1.1 billion to state agency and companies - Pertamina, BP Migas and PPA and US$700 million to foreign and local creditors.

Earlier PT Pertamina, PT PPA, and BP Migas already agreed on settling the US$1.1 billion debt under master restructuring agreement/MRA).

However, the MRA was cancelled in August 2012 as TPPI under its old management failed to fully meet the agreement leading to the take over by Pertamina and PPA.

Meanwhile, there was demand that TPPI was declared bankrupt and at the same time there were three proposals for the postponement of the debt repayment including one from the new management of TPPI.

The Commercial Court decided in favor of the postponement as proposed by Nippon Catalyst.
(Uu.AS/H-ASG/A014)

Editor: Priyambodo RH
Copyright © ANTARA 2012