FOR IMMEDIATE RELEASE February 10, 2008
Phil Cogan (202) 565-3200
Washington, D.C. --- A federal court in New York City has ruled in favor of the Export-Import Bank of the United States (Ex-Im Bank) and granted summary judgment in the Bank's civil suit to recover more than $104 million in defaulted loans from Asia Pulp & Paper Company (APP) -- a Singapore-based manufacturer of paper products -- and three of its principal Indonesian operating companies.
In March 2001, APP announced that it would cease repayment of its worldwide debts, which totaled approximately $13.9 billion. After this announcement, Ex-Im Bank participated in extensive discussions with APP and its Indonesian operating companies, as well as other creditors, in an attempt to reach an acceptable consensual restructuring solution and avoid litigation. Ultimately, the Bank opposed the final restructuring plan that was negotiated among APP, its operating companies, and certain of its other creditors. The Bank determined that it was necessary to go to court to assert its rights, and the U.S. Attorney's office successfully litigated the case.
The federal court's decision is a victory for U.S. taxpayers. It also reaffirms creditors' rights and demonstrates that no company, regardless of its size, is above the law, said Howard Schweitzer, Ex-Im Bank general counsel. The decision in this case sends an important message that Ex-Im Bank will vigorously pursue borrowers who fail to honor their obligations.
Ex-Im Bank is an independent federal government agency which helps create and sustain U.S. jobs by financing the sale of U.S. exports -- primarily to emerging markets throughout the world -- by providing loan guarantees, export credit insurance and direct loans.
APP's three principal Indonesian operating companies named as defendants in the suit are PT Indah Kiat Pulp & Paper Tbk (Indah Kiat); PT Pabrik Kertas Tjiwi Kimia Tbk (Tjiwi Kimia); and PT Pindo Deli Pulp & Paper Mills (Pindo Deli).
The Bank's lawsuit alleged that Indah Kiat, Tjiwi Kimia, and Pindo Deli defaulted on thirteen loan agreements into which they had entered with Ex-Im Bank, and that APP had unconditionally guaranteed repayment of three of those loans.
For more information on the Export-Import Bank of the United States visit the Bank's web site at www.exim.gov.