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Indah Kiat International Finance looks to extinguish debt via scheme
By Caroline Salls
Pittsburgh, Jan. 19 Indah Kiat International Finance Co. BV intends to execute a scheme of arrangement in England to extinguish note and judgment debt, according to a news release from Dechert LLP, legal counsel for noteholder APP Investment Opportunity LLC.
Indah Kiat issued 11 7/8% guaranteed secured notes due 2002 and 12½% guaranteed secured notes due 2006. The notes are guaranteed by PT Indah Kiat Pulp & Paper Tbk.
Dechert said various judgments of the Supreme Court of the State of New York have been rendered in connection with the notes, and Indah Kiat notified noteholders in December that it relocated and transferred its center of main interest to England on Nov. 9.
ŭThe first scheme hearing is scheduled for Thursday, the release said.
According to the release, APP ŭis opposed to the proposed scheme, which it considers to be unfair and not in the best interests of noteholders.
APP is arguing that the scheme would release the obligations of the guarantor, which is also jointly liable under the judgments and appears to be solvent with substantial assets.
APP also has procedural and jurisdictional concerns about the manner in which the scheme is structured, the release said.
Dechert said the company has so far refused a request by APP to adjourn the first scheme hearing to allow Indah Kiat to address the questions the noteholder has posed and to give other noteholders more time to consider the matter.
Unless its concerns are addressed, Dechert said APP intends to oppose the scheme at the hearing and to vote against it should a creditor vote take place.
Indah Kiat International Finance is a subsidiary of Jakarta, Indonesia-based Indah Kiat Pulp & Paper Tbk.
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