Indonesia

A tax amnesty program launched by Indonesia to bring home money stashed overseas by wealthy individuals has attracted 135.4 trillion rupiah (US$10.5 billion) in asset repatriation since July, the government said Friday, The Wall Street Journal reported. The announcement came at the end of the final day of the most generous terms, as low as 2% penalties, offered to those participating in the tax program, which will continue for six months.

PT Trikomsel Oke, an Indonesian mobile-phone retailer that defaulted on bonds last year, said that a court hearing on the company’s debt workout plan will be held today, Bloomberg News reported. A Jakarta commercial court had decided on Sept. 26 to postpone a deliberation meeting, the firm said in a filing to the Singapore stock exchange. The company said that it obtained approval from creditors based on the majority of votes cast at a meeting held on Sept. 22.

The Indonesian government will no longer bail out commercial banks when they face financial problems, but will instead force the institutions to use their own assets or those belonging to shareholders to raise funds in a crisis, according to a new regulation Parliament passed late last week, The Wall Street Journal reported.

Published data would suggest Indonesian banks are holding up well, in spite of the commodity downturn, a lack of diversification in the economy and protracted currency weakness. But there is good reason to believe such data do not tell the full story. While the true extent of stress is hard to gauge, it is unlikely that medium-sized banks, in particular, will be able to maintain healthy profits for long, according to FT Confidential Research, an FT investment research service.

Concern over external debt in corporate Indonesia is mounting as companies seek to roll over more than $42bn of foreign currency loans within the next 12 months, following a period of steep rupiah depreciation, the Financial Times reported. External debt is a red flag to investors. It added fuel to the Asian financial crisis of 1997-98, as ravaged currencies magnified foreign currency borrowings across swathes of the region. Some Asian currencies, including the Indonesian rupiah, are flirting with the levels hit at that time.

A unit of Indonesian coal miner PT Berau Coal Energy Tbk has filed a petition to have a debt moratorium granted by a Singapore court recognized in the United States, in a move to stave off creditors, Reuters reported. On July 7, the Singapore High Court imposed a moratorium preventing any creditor of Berau Capital Resources Pte Ltd from enforcing its rights against Berau Capital, its parent company or the guarantors of Berau Capital's $450 million bond. The moratorium, which lasts until Jan. 4, effectively bought time for Berau to negotiate with bondholders.

Multinational companies drawn to Southeast Asia by hopes of a long consumption boom are witnessing a reversal of fortunes in its three biggest economies as shoppers lose their mojo, the Financial Times reported. Household debt, sluggish wage rises and political uncertainties are dragging on spending growth in Thailand, Indonesia and Malaysia.

Three units of PT Bumi Resources, Asia’s most-indebted coal miner, filed for creditor protection in the U.S. after failing to make a semi-annual interest payment, Bloomberg News reported. Bumi Investment Pte Ltd listed assets and debt of as much as $1 billion each in Chapter 15 papers filed today in U.S. Bankruptcy Court in Manhattan. Bumi Capital Pte and Enercoal Resources Pte also sought court protection. Companies use Chapter 15 of the Bankruptcy Code to fend off creditor claims in the U.S. while they reorganize their finances elsewhere.

PT Bumi Resources’ bonds climbed the most in two weeks after holders of its $375 million of convertible debt approved a restructuring in a near-unanimous vote, Bloomberg News reported. The Indonesian coal mining company will issue 6 percent notes due April 2018 to replace the existing 9.25 percent securities that matured Aug. 5, a plan ratified by bondholders at a meeting in Singapore on Aug. 22. The proposal was supported by investors holding more than 98 percent of the debt, director Dileep Srivastava said in an e-mail after the meeting.

A former deputy governor of Indonesia's central bank was charged Thursday with allegedly taking bribes and abusing power in a bank bailout, as corruption emerges as a top issue in coming elections, The Wall Street Journal reported. Budi Mulya denies any wrongdoing in the US$750 million bailout in 2008 of PT Bank Century, now called PT Bank Mutiara. "I understand all the sentences, but I don't understand the substance," Mr. Mulya said in his only comment after state prosecutors finished reading the charges for trial, which began Thursday and is expected to last three to six months.