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Mulia Industrindo reaches $600 million debt deal

PT Mulia Industrindo, together with its three subsidiaries, have struck a deal with 76 creditors on the restructuring of their US$ 600 million debt, and the term sheet of the agreement will be signed…

PT Mulia Industrindo, together with its three subsidiaries, have struck a deal with 76 creditors on the restructuring of their US$ 600 million debt, and the term sheet of the agreement will be signed at the end of June 2000. According to the company“s management, the process has reached a stage where they are drafting a new credit agreement document, adding that the US$ 600 million loan has already matured and categorized default. Other subsidiaries that are also restructured include PT Muliaglass, in which Mulia Industrindo controls 99.99% of the shares, PT Muliakeramik Indahraya (99.9%) and PT Mulia Industrindo Finance BV. The management added that the terms to the debt restructuring were approved in the shareholders meeting, mainly on the warrant and share issuance to the creditors. The agreement includes a debt rescheduling until 31 October 2007, and a grace period over the amortization payment until the end of 2001. The debts have been split into two parts: Senior A represents 80% of the loan and B represents 20% of the total debts. No interests have been imposed on debts before the July 1998 restructuring. Consequently, the creditors will receive series A and B warrants and be entitled to 5% of the company shares. The total value of the warrant series is Rp 58.8 billion. If, for example, the company fails to pay the warrants until the due date on 31 October 2007, 15% of the shares will be taken out to be converted into debts. The amount of debt to be converted is US$ 110 million, or Rp 880 billion.

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