Extend the age of Poly
Trick of Tri Polyta to avoid execution of the creditors.

Monday, June 16, 2003

Tri Polyta has filed a claim to 96 of the creditors. They accused the creditors has fabricated the loan agreement. At the same moment, the creditors had executed asset of Tri Polyta that has been secured. Can they able to escape?

It was not false if one party said, Indonesia was an unexplained country. The impossible things may happen here. One of the unexplained was happen in the District Court of Serang, Banten, in the twisted position; it shall be executed by the foreign creditors, PT Tri Polyta Indonesia, Tbk. In other ways made the creditors confused. Since Tri Polyta has request the court to confiscate their plant.

Until the end of last year, position of creditors of Tri Polyta that has been head by Bank of New York was has been advantaged. Claim that has been filed to the District Court of Southern New York on October 2001, are remain in good position. For this case, Tri Polyta has become the defendant since Tri Polyta Finance BV, the subsidiaries, had failed to pay three coupon interests of guaranteed secured notes since 1999. Total obligation has reached in amount of US$ 60 million plus penalty in amount of US$ 8,7 million.

Tri Polyta also had conducted several actions to avoid the legal action taken by the creditors. If such claims are fulfilled, all asset of Tri Polyta in form of land, plant, and all the substance thereto shall fall to Bank of New York and all the creditors. At the beginning on 2002, the producer of plastic that belong to Prajogo Pengestu had offer the scheme of buy back over obligation with half point. However, such scheme is rejected by the creditor. The court remains to order Tri Polyta to fulfill their obligation. Or otherwise the asset shall be taken for execution.

Obstacles in the Court of New York did not made Tri Polyta terminate its actions. Even though there will be an asset execution, the petition almost be submitted to local district court. Several parties had assumed to cut the procedure; Tri Polyta had filed claim in reconvention the creditors as the bondholders, last February at District Court of Serang. There are 97 parties that has been filed legal actions. Two of them, having the domicile at Indonesia, such as: the Chase Manhattan Bank and National of Defense Agency of Serang.

What is the plan of Tri Polyta? Several sources of KONTAN represented the creditors has assume that the claim submitted via Hotman Paris Hutapea Law offices are only for extended the age of asset of Tri Polyta prior it was executed by the creditors. What should be the reason? While there is a claim, petition of creditors to perform execution are able to be obstructed.

Beside of such matter, invites other 97 parties which must of them are located abroad also require more period of time. “These are the moment to extend more time” said Rahmat Bastian, the Attorney in Fact of one creditor from BT Partnership Law Firm.

Is this the trick to buy all the bonds?

The content of Tri Polyta claim is to request the court to cancel the loan agreement that has been executed with Bank of New York as the creditor, year 1996. At that moment, it has been agreed, to decrease burden of tax that must be paid by Tri Polyta, further it made a pattern to transfer the tax. Tri Polyta is formed subsidiary Tri Polyta Finance BV (TPF) domiciled at Netherlands. The new company shall be the broker to transfer the debt to Tri Polyta.

Since the value of debt is significant enough, US$ 185 million, therefore it executed the indenture agreement. The content is order Tri Polyta Finance to issue bonds with the parent guarantee assets of Tri Polyta. Acted as the Trustee was Bank of New York and CEDE&Co must acted to sell on such bonds. For such requirement, Bank of New York and CEDE&Co appointed The Chase Manhattan Bank as the collateral agent.

Therefore, pursuant to the credit agreement and indenture agreement, status of Tri Polyta can become double, as debtor TPF and as guarantor. This reason is being utilized by Tri Polyta to accuse that this agreement was fabricated. With the status as a debtor, Tri Polyta did not possess legal obligation with the Bank of New York and Bondholder. Therefore, there is no reason for the Bank of New York and other creditor to execute asset of Tri Polyta, if Tri Polyta Finance did not afford to pay their obligation.

Attorney In Fact of bondholders that has been claimed confessed that they confused towards such legal action taken by Tri Polyta. "The agreement is binding. The unusual thing was why they claimed it now?” he said. Pursuant to the framework of this agreement, Tri Polyta has several times performed the payment of installment via Tri Polyta Finance. Bastian also underlined, in the financial statement issued by Tri Polyta, at these moment, such obligations also acknowledged. “Since it’s a public company,” He said.

For the unusual action of Tri Polyta, several lawyers assume, target of the claim are not just to extend period of time over execution that further shall be conducted by the Bank of New York. From the action, this case shall through an extensive court procedure. On the second summon- last Monday, June 9, -the court decide to adjourned the third summon until September. With the status, bond of Tri Polyta did not possess security (unsecured notes). "The price shall fall. That shall be the opportunity of Tri Polyta to buy back," said the lawyer of a creditor. That’s why the creditor must determine priority to release the security attachment that has been executed by Hj. Partiniah Alamsyah, Chairman of District Court of Serang, which also acted as the chairman of panel of judges over this case.

Until this article is written, Tri Polyta, as represented by the attorney in fact, Hotman Paris Hutapea, has not able to meet up with KONTAN although has been contact several times.

We shall await, whether the court includes the unexpected place that made everything is possible to happen.