21-06-02 The Indonesian Bank Restructuring Agency (IBRA), as the new controlling shareholder of PT Trans Pacific Petrochemical Indotama, expects to secure $ 400 mm in financing for the so-called Tuban project in the third quarter. IBRA's Asset Management Credit deputy chairman Mohammad Syahrial told that the construction of the $ 1-bn Tuban petrochemical project in East Java, is expected to be completed within 20 months after the funding is received.

Tuban petrochemical project will produce olefin with an annual capacity of 3.6 mm tons. Syahrial declined to name the banks participating in the syndicated loan, though he said some Singapore-based banks will be involved.
The Tuban project is one of the large projects surrendered by the Tirtamas Group to IBRA as part of the restructuring of the company's debt worth 4.2 tn rupiah. Syahrial said IBRA and Tirtamas have agreed to restructure the debt by setting up a new holding company, to be called PT Tuban Petro, in which IBRA will hold a 70 % stake while a former owner, Honggo Wendratno, will hold the remaining 30 %.

Tuban Petro will then control 59.5 % of the shares in PT Trans Pacific, 80 % of PT Polytama Propindo, 50 % of PT Petro Oxo Nusantara, and 50 % of PT Pacific Fibretama. The other shareholders of Trans Pacific include state-run oil and gas company Pertamina, Itochu, Siam Cement and Nissho Iwai.
In return, Tuban Petro will issue exchangeable bonds with a 10-year tenure and coupon rate of 1 % per annum in September. Syahrial said IBRA will have the right to sell the Tirtamas Group's assets after the restructuring. "The recovery rate could reach 68.7 % with the restructuring compared to only 16.3 % if the debt is not restructured," he said.