Identifier
Created
Classification
Origin
08JAKARTA1760
2008-09-17 08:43:00
CONFIDENTIAL
Embassy Jakarta
Cable title:
ASIA PULP & PAPER AND OAKTREE REACH SETTLEMENT IN
how-toVZCZCXRO4644 OO RUEHCHI RUEHCN RUEHDT RUEHHM DE RUEHJA #1760 2610843 ZNY CCCCC ZZH O 170843Z SEP 08 FM AMEMBASSY JAKARTA TO RUEHC/SECSTATE WASHDC IMMEDIATE 0116 INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY RUEHBJ/AMEMBASSY BEIJING 5402 RUEHBY/AMEMBASSY CANBERRA 3047 RUEHLM/AMEMBASSY COLOMBO 1306 RUEHKA/AMEMBASSY DHAKA 1276 RUEHNE/AMEMBASSY NEW DELHI 2243 RUEHPB/AMEMBASSY PORT MORESBY 3993 RUEHUL/AMEMBASSY SEOUL 4918 RUEHKO/AMEMBASSY TOKYO 2504 RUEHWL/AMEMBASSY WELLINGTON 3081 RUEHHK/AMCONSUL HONG KONG 2973 RUEHBAD/AMCONSUL PERTH 1139 RHHJJPI/USPACOM HONOLULU HI RHEFDIA/DIA WASHINGTON DC RUEAIIA/CIA WASHDC RHEHNSC/NSC WASHDC
C O N F I D E N T I A L JAKARTA 001760
SIPDIS
DEPT FOR EAP, EAP/MTS, EAP/MLS
DEPT FOR EEB/IFD/OIA-GOETHERT
NSC FOR EPHU
DOJ FOR CRIM AAG SWARTZ
DOJ/OIA FOR WARNER/ROBINSON
DOJ/OPDAT FOR ALEXANDRE/LEHMANN/JOHNSON
DOJ/AFMLS FOR SAMUEL
TREASURY FOR IA - MNUGENT AND TRAND
TREASURY FOR IA - MALACOY
USTR FOR EHLERS
SINGAPORE FOR SUSAN BAKER
COMMERCE FOR 4430-JEAN KELLY
DEPARTMENT PASS FEDERAL RESERVE SAN FRANCISCO FOR FINEMAN
DEPARTMENT PASS EXIM BANK
E.O. 12958: DECL: 09/17/2018
TAGS: ECON EINV PGOV ID
SUBJECT: ASIA PULP & PAPER AND OAKTREE REACH SETTLEMENT IN
2001 DEFAULT
Classified By: Ambassador Cameron R. Hume, for reasons 1.4 b+d
C O N F I D E N T I A L JAKARTA 001760
SIPDIS
DEPT FOR EAP, EAP/MTS, EAP/MLS
DEPT FOR EEB/IFD/OIA-GOETHERT
NSC FOR EPHU
DOJ FOR CRIM AAG SWARTZ
DOJ/OIA FOR WARNER/ROBINSON
DOJ/OPDAT FOR ALEXANDRE/LEHMANN/JOHNSON
DOJ/AFMLS FOR SAMUEL
TREASURY FOR IA - MNUGENT AND TRAND
TREASURY FOR IA - MALACOY
USTR FOR EHLERS
SINGAPORE FOR SUSAN BAKER
COMMERCE FOR 4430-JEAN KELLY
DEPARTMENT PASS FEDERAL RESERVE SAN FRANCISCO FOR FINEMAN
DEPARTMENT PASS EXIM BANK
E.O. 12958: DECL: 09/17/2018
TAGS: ECON EINV PGOV ID
SUBJECT: ASIA PULP & PAPER AND OAKTREE REACH SETTLEMENT IN
2001 DEFAULT
Classified By: Ambassador Cameron R. Hume, for reasons 1.4 b+d
1. (C) Summary: Oaktree Capital Management reached a
settlement with the Indonesian company Asia Pulp & Paper
(APP),resolving one remaining part of APP,s $14 billion
debt default in 2001. Terms were not disclosed, but Oaktree
counsel characterized the settlement as "reasonably
satisfactory." APP still has outstanding negotiations with
one remaining U.S. creditor, Gramercy. Separately, the
Indonesian Supreme Court is considering a move to overturn
the 2006 APP default case that ruled against U.S. creditors,
according to separate reports. End Summary.
2. (C) Asia Pulp & Paper (APP) announced on September 15 that
it reached a settlement with Oaktree Capital Management, one
of APP's creditors from its $14 billion default in 2001,
according to Reuters. Asia Pulp & Paper, which includes
affiliates PT Indah Kiat Pulp & Paper and PT Lontar Papyrus
Pulp & Paper, and Oaktree Capital Management agreed to a
"full and final settlement" of all litigation and disputes
between the parties, according to an APP statement. Oaktree
legal counsel confirmed these reports and described the
agreement as "reasonably satisfactory resolution."
3. (C) The 2001 APP $4 billion default is not completely
resolved. Gramercy and other creditors were not part of this
APP-Oaktree settlement. Gramercy has demanded a much higher
rate for settlement compared to Oaktree, according to
contacts.
4. (C) Separately, the Supreme Court is conducting a judicial
review of the 2006 Supreme Court decision that ruled in favor
of APP. The Supreme Court ruled that the APP bond format was
illegal under Indonesian law, relieving APP of any
responsibility to repay its creditors. Supreme Court could
issue a decision shortly that rules in favor of the debtors
and overturning previous court decisions, according to an
Indonesian legal reform contact.
HUME
SIPDIS
DEPT FOR EAP, EAP/MTS, EAP/MLS
DEPT FOR EEB/IFD/OIA-GOETHERT
NSC FOR EPHU
DOJ FOR CRIM AAG SWARTZ
DOJ/OIA FOR WARNER/ROBINSON
DOJ/OPDAT FOR ALEXANDRE/LEHMANN/JOHNSON
DOJ/AFMLS FOR SAMUEL
TREASURY FOR IA - MNUGENT AND TRAND
TREASURY FOR IA - MALACOY
USTR FOR EHLERS
SINGAPORE FOR SUSAN BAKER
COMMERCE FOR 4430-JEAN KELLY
DEPARTMENT PASS FEDERAL RESERVE SAN FRANCISCO FOR FINEMAN
DEPARTMENT PASS EXIM BANK
E.O. 12958: DECL: 09/17/2018
TAGS: ECON EINV PGOV ID
SUBJECT: ASIA PULP & PAPER AND OAKTREE REACH SETTLEMENT IN
2001 DEFAULT
Classified By: Ambassador Cameron R. Hume, for reasons 1.4 b+d
1. (C) Summary: Oaktree Capital Management reached a
settlement with the Indonesian company Asia Pulp & Paper
(APP),resolving one remaining part of APP,s $14 billion
debt default in 2001. Terms were not disclosed, but Oaktree
counsel characterized the settlement as "reasonably
satisfactory." APP still has outstanding negotiations with
one remaining U.S. creditor, Gramercy. Separately, the
Indonesian Supreme Court is considering a move to overturn
the 2006 APP default case that ruled against U.S. creditors,
according to separate reports. End Summary.
2. (C) Asia Pulp & Paper (APP) announced on September 15 that
it reached a settlement with Oaktree Capital Management, one
of APP's creditors from its $14 billion default in 2001,
according to Reuters. Asia Pulp & Paper, which includes
affiliates PT Indah Kiat Pulp & Paper and PT Lontar Papyrus
Pulp & Paper, and Oaktree Capital Management agreed to a
"full and final settlement" of all litigation and disputes
between the parties, according to an APP statement. Oaktree
legal counsel confirmed these reports and described the
agreement as "reasonably satisfactory resolution."
3. (C) The 2001 APP $4 billion default is not completely
resolved. Gramercy and other creditors were not part of this
APP-Oaktree settlement. Gramercy has demanded a much higher
rate for settlement compared to Oaktree, according to
contacts.
4. (C) Separately, the Supreme Court is conducting a judicial
review of the 2006 Supreme Court decision that ruled in favor
of APP. The Supreme Court ruled that the APP bond format was
illegal under Indonesian law, relieving APP of any
responsibility to repay its creditors. Supreme Court could
issue a decision shortly that rules in favor of the debtors
and overturning previous court decisions, according to an
Indonesian legal reform contact.
HUME