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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 6K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULES 13a-16 AND 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF JULY, 1998
P.T. POLYTAMA PROPINDO
MIDPLAZA 2 BUILDING, 20TH FLOOR
JALAN JEND. SUDIRMAN KAV, 10-11
JAKARTA 10220
INDONESIA
(ADDRESS OF PRINCIPAL REGISTRANT'S EXECUTIVE OFFICE)
(INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL FILE ANNUAL REPORTS
UNDER COVER OF FORM 20-F OR FORM 40-F)
FORM 20-F [X] FORM 40-F [ ]
(INDICATE BY CHECK MARK WHETHER THE REGISTRANT BY FURNISHING THE INFORMATION
CONTAINED IN THIS FORM IS ALSO THEREBY FURNISHING THE INFORMATION TO THE
COMMISSION PURSUANT TO RULE 12g3-2(b) UNDER THE SECURITIES EXCHANGE ACT OF
1934.)
YES [ ] NO [X]
(IF "YES" IS MARKED, INDICATE BELOW THE FILE NUMBER ASSIGNED TO THE REGISTRANT
IN CONNECTION WITH RULE 12g3-2(b): 82- )
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SUMMARY
On July 13, 1998, Polytama International Finance B.V. (the "Issuer") and
P.T. Polytama Propindo (the "Company") launched the consent solicitation (the
"Consent Solicitation") to modify certain provisions of the Issuer's outstanding
$200,000,000 11 1/4% Notes due 2007 (the "Existing Notes"), guaranteed by the
Company (the "Existing Notes", as so modified, the "Modified Notes"). This Form
6-K includes the Consent Solicitation documents, which consist of the Consent
Solicitation Statement, the Revised Consent Form, Letters to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees and the Letter to Holders.
If the modifications to the Existing Notes are deemed to involve the
issuance of a new security, the Issuer and the Company are relying upon the
exemption from the registration requirements of the Securities Act of 1933 (the
"Securities Act"), as amended, provided by Section 3(a)(9) of the Securities
Act.
The Form T-3, which describes the exemption from the registration
requirements of the issuance of the Modified Notes available under Section
3(a)(9), was filed by both the Issuer and the Company with the Securities
Exchange Commission on July 13, 1998 (the "Application on Form T-3"). Amendment
No. 1 to the Application on Form T-3 was filed on July 28, 1998 (the
"Amendment"). A copy of the Application on Form T-3 and a copy of the Amendment
are incorporated herein by reference. The Company's Annual Report on Form 20-F
(the "20-F") should be read in conjunction with the Consent Solicitation
Statement. A copy of the 20-F was filed on June 30, 1998 and is also
incorporated herein by reference.
2
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SIGNATURES
Pursuant to the Requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
P.T. Polytama Propindo
(Registrant)
By: /s/ HONGGO WENDRATNO
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Name: Honggo Wendratno
Title: President Director
Date: July 14, 1998
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
Exhibit 1: Consent Solicitation Statement dated July 13, 1998:
Solicitation of Consents to Amend Indenture relating to
11 1/4% Guaranteed Secured Notes due 2007 (the "Notes")
issued by Polytama International Finance B.V.
(US$200,000,000 principal amount outstanding) Irrevocably
and Unconditionally Guaranteed as to Payment of Principal,
Premium, Interest and Additional Amounts, if any, by P.T.
Polytama Propindo.
Exhibit 2: Consent Form: Revised Form for Consenting to the Proposed
Amendments (the "Revised Consent Form") Pursuant to the
Consent Solicitation Statement dated July 13, 1998 relating
to the Notes, as distributed to Holders of the Notes on July
14, 1998.
Exhibit 3: Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated July 13, 1998.
Exhibit 4: Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated July 14, 1998.
Exhibit 5: Letter to Holders, dated July 14, 1998.
Exhibit 6*: The Company's Annual Report on Form 20-F, filed on June 30,
1998 (Commission File No. 333-06854-01), and incorporated
herein by reference.
Exhibit 7*: The Application on Form T-3, filed on July 13, 1998
(Commission File No. 022-22385-01), and incorporated herein
by reference.
Exhibit 8*: The Amendment to the Application on Form T-3, filed on July
28, 1998 (Commission File No. 022-22385-01) and incorporated
herein by reference.
</TABLE>
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* Incorporated herein by reference. All other exhibits are filed herewith.
<PAGE> 1
EXHIBIT T3E.1
CONFIDENTIAL
CONSENT SOLICITATION STATEMENT
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
SOLICITATION OF CONSENTS TO AMEND INDENTURE
relating to
11 1/4% GUARANTEED SECURED NOTES DUE 2007
issued by
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 principal amount outstanding)
Irrevocably and Unconditionally Guaranteed as to Payment of Principal,
Premium, Interest and Additional Amounts, if any, by
P.T. POLYTAMA PROPINDO
Each of Polytama International Finance B.V. (the "Issuer") and P.T.
Polytama Propindo (the "Guarantor") is soliciting (the "Consent Solicitation")
the consents (the "Consents") of holders of record (the "Holders") as of July 9,
1998 (the "Record Date") of its 11 1/4% Guaranteed Secured Notes due 2007 (the
"Notes"), which are irrevocably and unconditionally guaranteed as to payment of
Principal, Premium, Interest and Additional Amounts, if any, by the Guarantor to
certain amendments (the "Proposed Amendments") to the indenture governing the
Notes (the "Indenture") under which The Bank of New York is the Trustee (the
"Trustee").
The solicitations are being made upon the terms and are subject to the
conditions set forth in this Consent Solicitation Statement and in the
accompanying Consent Form. Adoption of the Proposed Amendments to the Indenture
requires the consent of Holders of 100% of the aggregate principal amount of the
Notes outstanding as of the Record Date (the "Requisite Consents").
The Proposed Amendments (i) permit the Issuer to use funds in the
Subsidiary Investment Account to make the interest payment due on the Notes on
June 15, 1998, to redeem a portion of the Notes and to pay certain fees and
expenses, and (ii) give the Issuer the option to make certain payments of
interest on the Notes through the issuance of Additional Securities under the
Indenture. See "Purpose of the Consent Solicitation" and "The Proposed
Amendments."
THE CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON AUGUST 10,
1998, UNLESS EXTENDED (AS SO EXTENDED, THE "EXPIRATION DATE"). IF THE REQUISITE
CONSENTS WITH RESPECT TO THE CONSENT SOLICITATION HAVE NOT BEEN RECEIVED BY 5:00
P.M., NEW YORK TIME, ON THE EXPIRATION DATE, THE ISSUER MAY EXTEND THE CONSENT
SOLICITATION FOR A SPECIFIED PERIOD OR ON A DAILY BASIS UNTIL THE REQUISITE
CONSENTS HAVE BEEN RECEIVED.
Consent may be revoked by a Holder at any time prior to the receipt by the
Trustee of the Requisite Consents (the "Requisite Consent Date") on the terms
and conditions set forth herein and the effectiveness of the Proposed
Amendments, and will be automatically revoked if the Requisite Consents are not
obtained prior to the Expiration Date.
The information contained in this Consent Solicitation Statement is based
upon information provided solely by the Guarantor and the Issuer. Neither the
Procedural Advisor (as defined herein) nor the Information Agent (as defined
herein) has independently verified or makes any representation or warranty,
express or implied, or assumes any responsibility, for the accuracy or adequacy
of the information contained herein.
Each Holder is requested to read and carefully consider the information
contained herein and to give its consent to the Proposed Amendments by properly
completing and executing the accompanying Consent Form in accordance with the
instructions set forth herein and therein.
July 13, 1998
<PAGE> 2
The Proposed Amendments will become effective only upon (i) there being
received (and not revoked) prior to the Expiration Date the Requisite Consents
(the "Requisite Consent Condition"), (ii) execution by the Issuer, the Guarantor
and the Trustee of a First Supplemental Indenture, which embodies the Proposed
Amendments (the "Supplemental Indenture"), and (iii) the satisfaction of certain
other conditions. See "The Consent Solicitation -- Conditions to the Consent
Solicitation." The Issuer and the Guarantor intend to execute the Supplemental
Indenture as soon as practicable after the Requisite Consent Condition has been
satisfied.
No consent will be deemed to have been accepted until the Supplemental
Indenture is executed by the Issuer, the Guarantor and the Trustee and all
applicable other conditions have been satisfied or waived. Consents may be
revoked in accordance with the procedure set forth herein and in the Consent
Form at any time prior to the Requisite Consent Date, and will be automatically
revoked if the Requisite Consents are not obtained prior to the Expiration Date.
"The Consent Solicitation -- Revocation of Consents."
The Issuer expressly reserves the right, in its discretion and regardless
of whether any of the conditions described under "The Consent
Solicitation -- Conditions to the Consent Solicitation" have been satisfied,
subject to applicable law, to (i) terminate the Consent Solicitation upon the
failure to meet a condition specified herein or for any other reason; (ii) waive
any of the conditions to the Consent Solicitation; (iii) extend the Expiration
Date; or (iv) amend the terms of the Consent Solicitation. See "The Consent
Solicitation -- Expiration Date; Extensions; Amendment."
Only Holders are eligible to consent to the Proposed Amendments. Any
beneficial owner of Notes who is not a Holder of such Notes must arrange with
the person who is the Holder or such Holder's assignee or nominee to execute and
deliver a Consent Form on behalf of such beneficial owner. FOR PURPOSES OF THE
CONSENT SOLICITATION, THE DEPOSITORY TRUST COMPANY ("DTC") HAS AUTHORIZED DTC
PARTICIPANTS ("PARTICIPANTS") SET FORTH IN THE POSITION LISTING OF DTC AS OF THE
RECORD DATE TO EXECUTE CONSENT FORMS AS IF THEY WERE THE HOLDERS OF THE NOTES
HELD OF RECORD IN THE NAME OF DTC OR THE NAME OF ITS NOMINEE. ACCORDINGLY, FOR
PURPOSES OF THE CONSENT SOLICITATION, THE TERM "HOLDER" SHALL BE DEEMED TO
INCLUDE SUCH PARTICIPANTS.
The transfer of Notes after the Record Date will not have the effect of
revoking any consent validly given prior to such transfer, and each properly
completed and executed Consent Form will be counted notwithstanding any transfer
of the Notes to which such Consent Form relates, unless the applicable holder
has complied with the procedure for revoking consents described herein and in
the Consent Form.
HOLDERS WHO WISH TO CONSENT MUST DELIVER THEIR PROPERLY COMPLETED AND
EXECUTED CONSENT FORM TO THE INFORMATION AGENT AT THE ADDRESSES SET FORTH ON THE
BACK COVER PAGE OF THIS CONSENT SOLICITATION STATEMENT AND IN THE CONSENT FORM
IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH HEREIN AND THEREIN. CONSENTS
SHOULD NOT BE DELIVERED TO THE ISSUER, THE GUARANTOR, THE FINANCIAL ADVISOR OR
THE TRUSTEE. HOWEVER, THE ISSUER RESERVES THE RIGHT TO ACCEPT ANY CONSENT
RECEIVED BY ITSELF, THE GUARANTOR, THE FINANCIAL ADVISOR OR THE TRUSTEE. UNDER
NO CIRCUMSTANCES SHOULD ANY PERSON TENDER OR DELIVER NOTES TO THE ISSUER, THE
GUARANTOR, THE FINANCIAL ADVISOR, THE TRUSTEE OR THE INFORMATION AGENT AT ANY
TIME.
No person has been authorized to give any information or make any
representation other than those contained or incorporated by reference herein or
in the accompanying Consent Form and other materials, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Issuer, the Guarantor, the Procedural Advisor, the Trustee,
the Information Agent or any other person. The statements made in this Consent
Solicitation Statement are made as the date hereof, and the delivery of this
Consent Solicitation Statement shall not under any circumstances create any
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
(ii)
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Recipients of this Consent Solicitation Statement and the accompanying
materials should not construe the contents hereof of thereof as legal, business
or tax advice. Each recipient should consult its own attorney, business advisor
and tax advisor as to legal, business, tax and related matters concerning this
solicitation.
TERMS USED IN THIS DOCUMENT THAT ARE NOT OTHERWISE DEFINED HEREIN HAVE THE
MEANINGS SET FORTH IN THE GUARANTOR'S ANNUAL REPORT ON FORM 20-F FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1997 OR, IF NOT DEFINED THEREIN, IN THE INDENTURE.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information....................................... 1
Incorporation of Certain Documents by Reference............. 1
Purpose of the Consent Solicitation......................... 1
The Proposed Amendments..................................... 8
The Consent Solicitation.................................... 8
Certain Income Tax Considerations........................... 13
Miscellaneous............................................... 18
Annex A: Form of Supplemental Indenture..................... A-1
Annex B: Comparison of Indenture Provisions Affected by
Proposed Amendments................................ B-1
</TABLE>
(iii)
<PAGE> 4
AVAILABLE INFORMATION
The Guarantor is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other information filed
by the Guarantor may be inspected at the public reference facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the Commission:
New York Regional Office, 7 World Trade Center, 12th Floor, New York, New York
10048; and Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained
from the Public Reference Section of the Commission, upon payment of fees
prescribed by the Commission. Reports, proxy and information statements and
other information filed with the Commission through the Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") system are publicly available
through the Commission's Internet website (http://www.sec.gov).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission by the
Guarantor and are hereby incorporated by reference in this Consent Solicitation
Statement:
1. The Guarantor's Annual Report on Form 20-F for the fiscal year
ended December 31, 1997 (the "1997 20-F").
2. Such other reports filed pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act and, to the extent designated therein, reports on
Form 6-K furnished by the Guarantor after the date hereof and through the
Expiration Date.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Consent Solicitation Statement to the extent that a
statement contained herein or in any other subsequently filed document that also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Consent Solicitation Statement. Subject to the foregoing, all information
appearing in this Consent Solicitation Statement is qualified in its entirety by
the information appearing in the documents incorporated herein by reference.
Copies of all documents that are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owners, to whom this
Consent Solicitation Statement is delivered, upon request. Copies of this
Consent Solicitation Statement, as amended or supplemented from time to time and
any other documents (or parts of documents) that constitute part of this Consent
Solicitation Statement will also be provided without charge to each such person,
upon request. Requests should be directed to the Information Agent, at the
address and telephone number set forth on the last page.
PURPOSE OF THE CONSENT SOLICITATION
The purpose of the Consent Solicitation is to approve the Proposed
Amendments.
BACKGROUND
As of the date of this Consent Solicitation Statement, the Issuer has
outstanding US$200,000,000 principal amount of Notes which mature on June 15,
2007. The Notes are irrevocably and unconditionally guaranteed (the "Guarantee")
as to principal, premium, interest and Additional Amounts, if any, by the
Guarantor. The Guarantee is an irrevocable, direct, unconditional and secured
obligation of the Guarantor and ranks pari passu with all other existing and
future Senior Indebtedness of the Guarantor.
1
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As of the date of this Consent Solicitation Statement, the Issuer and the
Guarantor have failed to pay the interest payment due and payable on the Notes
on June 15, 1998. Please refer to the 1997 20-F for a discussion of the
Guarantor's financial condition and the circumstances surrounding the failure to
pay interest. See especially Item 9 -- "Management's Discussion and Analysis of
Financial Condition and Results of Operations" for a discussion of the
Guarantor's current serious liquidity situation.
Upon issuance of the Notes, approximately US$51,750,000 of the proceeds
(the "Restricted Proceeds") were deposited in an account established with the
Collateral Agent in Jakarta (the "Subsidiary Investment Account") which, but for
certain restrictions imposed on their use under the Indenture, would be
available to satisfy in full the June 15, 1998 interest payment. Under the
Indenture, the Restricted Proceeds are required to be retained in a separate
account and used to make investments in Polytama II, a majority-owned subsidiary
of the Guarantor created for the purpose of building and operating a
polypropylene plant in Tuban, East Java Indonesia (the "Polytama II Project").
Pending the investment of the Restricted Proceeds in Polytama II, the Restricted
Proceeds are being held by the Collateral Agent in the Subsidiary Investment
Account as part of the collateral securing the Notes.
The Indenture also provides that if, by June 30, 1999, US$5 million or more
of proceeds remain in the Subsidiary Investment Account and are not subject to
legally binding commitments for Use of Proceeds Transactions (as defined in the
Indenture), then the Issuer or the Guarantor must make an offer to repurchase
Notes in an aggregate amount equal to the uncommitted proceeds at a price equal
to 101% of the principal. To the extent that the aggregate amount of Notes
tendered pursuant to such an offer is less than the amount of proceeds in the
Subsidiary Investment Account, or if the balance in the account is less than
US$5 million as of June 30, 1999, the Guarantor will be free to use the
remaining proceeds in any manner not otherwise prohibited by the Indenture.
As a result of recent developments within Indonesia, the sharp devaluation
of the Indonesian Rupiah and the overall deterioration in the market condition
for new development projects in Indonesia, the plans for the development of the
Polytama II Project have been indefinitely postponed. (See 1997 20-F, Item
9 -- "Recent Developments Regarding Polytama II.") At present, approximately
$51,750,000 is held in the Subsidiary Investment Account. The Indenture
prescribes no other uses for the Restricted Proceeds other than as set forth
above.
SUMMARY OF PROPOSED AMENDMENTS
The principal effect of the Proposed Amendments will be to permit the
Guarantor to make effective use of the funds in the Subsidiary Investment
Account. To accomplish this, the Proposed Amendments will provide for the
following:
(i) The Guarantor will use funds in the Subsidiary Investment Account
to cause the Issuer to pay the June 15, 1998 interest payment of US$11.25
million, and withholding taxes due the Indonesian government with respect
thereto. The total to be used for this purpose will be $12,500,000. By
consenting to the Proposed Amendments, holders will waive their rights, if
any, to overdue interest or interest on interest with respect to the June
15, 1998 interest payment.
(ii) The Guarantor will be entitled to use funds in the Subsidiary
Investment Account, up to a maximum amount of $500,000, to pay the fees and
expenses incurred in connection with the Consent Solicitation.
(iii) The Guarantor will use the balance of the funds in the
Subsidiary Investment Account to cause the Issuer to redeem Notes on a pro
rata basis, in integral multiples of $1,000, and to pay accrued interest to
the redemption date and withholding taxes due the Indonesian government
with respect to such accrued interest. If the redemption date is August 15,
1998, the aggregate amount of Notes redeemed will be $34,583,333, aggregate
accrued interest will be $3,750,000 and withholding taxes will be $416,667.
(iv) With respect to interest payments due on December 15, 1998, June
15, 1999 and December 15, 1999, the Guarantor will have the option of
causing the Issuer to make these payments in cash or to issue to all Note
holders additional Notes together with the Guarantee ("Additional
Securities"), in an
2
<PAGE> 6
aggregate amount equal to the interest due, identical to the existing
Securities except that they will be dated the date of the relevant interest
payment date and except that, if such option is exercised for the interest
payment due on December 15, 1999, the amount of interest due on such date
for this purpose will be calculated at the rate of 13% per annum for the
period commencing on June 15, 1999 and ending on December 15, 1999.
(v) No other use of the funds in the Subsidiary Investment Amount will
be permitted.
Assuming that the payments in (iii) above are made on August 15, 1998 and
that the Guarantor causes the Issuer to exercise its option to make the interest
payments due on December 15, 1998, June 15, 1999 and December 15, 1999 with the
issuance of Additional Securities, the aggregate principal amount of Notes
outstanding on December 16, 1999 will be approximately $193,056,176. This amount
is for illustration only and will be subject to change to the extent that the
payments in (iii) above are made on a date other than August 15, 1998.
The Guarantor has been advised that, in order for the Additional Securities
to have the benefit of the liens afforded by the Security Documents and the
Guarantee, certain amendments need to be made to the Security Documents.
Accordingly, by consenting to the Proposed Amendments, Holders will authorize
the Trustee to direct the Collateral Agent to enter into amendments of the
Securities Documents for this purpose, and it will be a condition precedent to
the issuance of any of the Additional Securities that the Trustee has received
the opinion of Indonesian counsel to the Guarantor substantially to the effect,
among other things, that the Additional Securities are valid and binding
obligations of the Issuer and the Guarantor, respectively, and that the
Additional Securities will have the benefit of the liens afforded by the
Security Documents and the Guarantee.
BENEFITS TO THE GUARANTOR OF THE PROPOSED AMENDMENTS
If adopted, the Proposed Amendments will permit the Guarantor to make
effective use of the liquidity represented by the funds in the Subsidiary
Investment Account to fund debt service payments due on the Notes through the
period ending on June 15, 2000, when the next payment permitted only in cash
will be due on the Notes. The Guarantor will also have the benefit of the
increased cash flow resulting from the interim and permanent reduction in
principal of the Notes effected by the Proposed Amendments.
In this manner, the Guarantor will have a period of approximately 24 months
(until the June 15, 2000 interest payment is due) to focus its efforts on the
cash conservation and enhancement objectives described in the 1997 20-F. (See
Item 1 -- "Description of Business -- Business Strategy.") In this regard, the
Guarantor believes that the past six months included an unusual concentration of
economic, social, political and operational difficulties that have disrupted
business activities in Indonesia and domestic market conditions generally and
the operations of the Guarantor in particular. In the event domestic and Asian
demand for polypropylene recovers from existing levels and PP (as defined in the
1997 20-F) firms and widens to reflect more normal market conditions, the
Guarantor believes it can generate sufficient cash in its operations in the near
term to meet its working capital requirements and, as conditions further improve
over time, to meet required interest payments as well. However, there can be no
assurance that conditions will so improve, or that other economic, social or
political difficulties may not arise that would adversely affect the Guarantor's
operations and cash flow. (See the 1997 20-F, Item 9 -- "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" for a discussion of the Guarantor's current serious liquidity
situation.)
IF CONSENTS NOT OBTAINED
Acceleration
The Guarantor, as of the date hereof, has not made the scheduled interest
payment on the Notes which was due June 15, 1998. Under the terms of the
Indenture, default in the payment of interest on the Notes which continues for a
period of 30 days constitutes an "Event of Default." Upon the occurrence and
continuation of an Event of Default, the Trustee or the Holders of not less than
25% in aggregate principal
3
<PAGE> 7
amount of the Notes then outstanding may declare the principal of, premium on,
and accrued interest on all of the outstanding Notes immediately due and
payable. The Guarantor believes that an Event of Default will occur on July 15,
1998.
Foreclosure and Collateral
Upon acceleration, the Note holders have, among others, the right to
foreclose upon the assets of the Company which are subject to the lien of the
Security Documents (the "Collateral"), which include the funds in the Subsidiary
Investment Account, in the manner provided in and subject to the terms of the
Indenture, the Guarantee, the Collateral Agency Agreement and the Security
Documents.
While the following summary description of the Collateral does not purport
to be complete and is subject to, and qualified in its entirety by reference to,
the Security Documents, including the definitions of certain terms contained
therein, the Collateral in summary consists of the following:
(i) from and after registration of the Security Deed within 90 days of
the Issue Date (which has occurred), the real property (including the land,
buildings, facilities and other assets permanently affixed thereto whether
now owned or hereafter acquired) comprising the Plant;
(ii) all moveable assets (other than Inventory, goods in process and
raw materials), whether now owned or hereafter acquired, which form a part
of, or are otherwise used in connection with, the Plant;
(iii) all insurance proceeds relating to the Plant;
(iv) the portion of the proceeds of the Notes held from time to time
in the Subsidiary Investment Account; and
(v) all rights arising out of or related to all contracts (including
the Propylene Supply Contract) and leases relating to the Plant, its
operation and the manufacture of polypropylene therein.
Part of the Pipeline through which the Company receives propylene from
Pertamina is located on land adjacent to the Plant Site, which is not owned by
the Company. The Collateral includes the Pipeline, but does not include an
assignment of the Company's rights to use certain land owned by a third party on
which a portion of the Pipeline is located. See "Difficulties with Foreclosure
Process."
Difficulties with Foreclosure Process
Indonesian law requires that foreclosure of a lien against property subject
to a security deed be effected by the holders of the registered security deed
either pursuant to a public auction conducted by the state auction office or, if
agreed by the parties to the security deed, by private sale. Any private sale
must be for the highest price available for the benefit of all parties, and can
be completed only if no objections are raised within one month after written
notice is given to the parties concerned and notices have been announced in at
least 2 daily newspapers circulated at the location of the property which is the
object of the security deed or in other local media. Under existing practice,
the state auction office will not conduct auction proceedings unless the secured
party has first obtained a writ of execution from the district court having
jurisdiction where the Guarantor is domiciled or in the chosen domicile of the
Guarantor, which could be where the land is located. In Indonesia, the prior
court decisions are guidelines only and are not binding precedents. As a result,
proceedings prior to a public auction can be lengthy and complex. In addition,
Indonesian law does not provide statutory guidance with respect to the
enforcement of a fiduciary transfer or with respect to the rights of the party
receiving a fiduciary transfer. While the secured party is considered the owner
of the property covered thereby and has the contractual right to repossess the
property, any foreclosure must be performed through public auction. In addition,
the "Balai Harta Peninggalan" (the "State Trustee"), a special agency of the
Department of Justice which acts as official receiver and administrator of
bankrupt estates, could take actions contrary to such contractual rights in the
interest of other creditors. In respect of the Security Deed, in the case of the
bankruptcy of the Guarantor, the holders of the registered Security Deed are by
virtue of Article 21 of the Mortgage Law entitled to exercise their rights under
the Mortgage Law.
4
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Under Indonesian law, an assignment of contractual rights will only bind
the obligor of the assigned rights after that obligor has been properly notified
of the assignment through the applicable district court, or has accepted or
acknowledged the assignment in writing. The Assignment of Rights did not require
the Guarantor to notify the obligor as a condition to closing of the initial
issuance of Notes or to make such notification until the occurrence of certain
events and if requested by the Collateral Agent. The Guarantor currently is in
negotiations to obtain the consent of (i) BP Chemicals to the assignment of
rights under the Propylene Supply Agreement, and (ii) Montell North America
Inc., formerly Himont Incorporated, to the assignment of rights under the
contract pursuant to which the Guarantor uses the SPHERIPOL(R) process at the
Plant for the production of polypropylene. There can be no assurance that any
consent referred to above can be obtained. If such consents are not obtained,
the Assignment of Rights will not initially be perfected against the obligors
under the contracts referred to above.
In addition, the Guarantor's interest in inventory, governmental permits,
licenses and approvals and certain rights relating to the Pipeline are not
included in the Collateral. In addition, persons or entities that are not
Indonesian nationals are generally prohibited from owning real or immoveable
property in Indonesia. Accordingly, any purchaser in a foreclosure sale would
have to meet Indonesian citizenship requirements and would not have all the
property, permits, licenses and approvals and rights relating to the Pipeline
necessary to produce polypropylene at the Plant. Such purchaser would have to
obtain separate permits and licenses to produce polypropylene from the
Indonesian government in order to be able to operate the Plant subsequent to
such sale.
Part of the Pipeline through which the Guarantor receives propylene is
located on land adjacent to the Plant Site, which is directly controlled by the
Indonesian government. The Guarantor has negotiated certain arrangements to
obtain certificated title to a portion of such land and rights to use another
portion of such land for the Pipeline. However, even though the Guarantor has
negotiated such arrangements, the Collateral does not include an assignment of
the Guarantor's rights to use certain land owned by a third party on which a
portion of the Pipeline is located.
Under Article 56A of the amended Bankruptcy Law (effective as of 22 August,
1998), the foreclosure right of a secured creditor of a bankrupt debtor is
stayed for a maximum period of 90 days as of the date of the adjudication in
bankruptcy, unless the debt is secured by cash or other readily available funds.
Additionally, a debtor may submit a petition for a suspension of payment of its
debts. If granted, foreclosure by a secured creditor may be stayed for a maximum
of 270 days from the date of the decision of the court to grant such suspension
of payment. The initial period of the suspension is a maximum of 45 days and
depending on the composition plan submitted to the court and the creditors, the
court may grant a further suspension if approved by more than 1/2 of the
unsecured creditors whose claims have been accepted or provisionally accepted
and who represent at least 2/3 of the claims of the unsecured creditors whose
claims have been accepted or provisionally accepted.
The foregoing factors could have an adverse impact on the Collateral
Agent's ability to foreclose on the Collateral or on the price of the Collateral
in any foreclosure proceeding. No assurance can be given that, should
enforcement of the Security Documents be sought, there would be any purchasers
of the Collateral or that the purchase price therefor would be sufficient to
satisfy all the obligations of the Issuer and the Guarantor under the Notes and
the Guarantee and any outstanding indebtedness.
CERTAIN SIGNIFICANT CONSIDERATIONS
In addition to the other information described elsewhere and incorporated
by reference herein, Holders should consider that if the Proposed Amendments
become effective, four semi-annual interest payments on the Notes can
effectively be made with proceeds that were previously designated for investment
in Polytama II and that, failing such use by June 30, 1999, would be used for
the repurchase of Notes by July 31, 1999. If the Proposed Amendments are
adopted, the Default and any Event of Default with respect to the June 15, 1998
interest payment will be cured and any Default will be avoided with respect to
non-payment in cash of the December 15, 1998, June 15, 1999 and December 15,
1999 interest payments, thereby depriving the Holders of rights they might
otherwise have with respect to these interest payments. Accordingly, adoption
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<PAGE> 9
of the Proposed Amendments could increase the credit risks of the Holders with
respect to the Guarantor, could adversely affect the future market value of the
Notes or might otherwise be materially adverse to the interests of Holders.
Finally, certain working capital facilities of the Guarantor have expired
with amounts outstanding under them. (See the 1997 20-F, Item 9 -- "Liquidity
and Capital Resources -- Net Cash Provided by (used in) Operating Activities.")
While the lenders under these facilities have not to date expressed an intention
to pursue payment on these facilities in the near term, there can be no
assurance that they will not do so. If payment for the amounts due under these
facilities is so pursued and such amounts not paid, the Guarantor could become
the subject of proceedings for the enforcement of creditors rights, including
bankruptcy proceedings, under Indonesian law.
SUPPLEMENTAL INFORMATION
June Financial Information.
The following supplements the discussion and information in the 1997 20-F
which appears at Item 9 -- "Management's Discussion and Analysis of Financial
Conditions and Results of Operations -- Developments in 1998 -- Selected
Financial and Operational Data for the First Five Months in 1998" and should be
read in conjunction with that discussion and information. Footnotes indicated
are references to the footnotes in the 1997 20-F with respect to the similar
financial information which appears therein.
The Guarantor maintains monthly data only in its internal management
reports. Management report information is unaudited and not reviewed by the
Guarantor's accountants. In the ordinary course, management report information
requires adjustment and can reflect errors in attribution among periods.
Although the information is believed to be accurate by the Guarantor, potential
investors are cautioned that the information supplied may require such
adjustments or contain errors in its presentation. The Guarantor has provided
the following financial information on a monthly basis only because of the
Guarantor's current
6
<PAGE> 10
circumstances and impending consent solicitation. The Guarantor does not
necessarily intend to provide such financial data on a monthly basis in the
future.
<TABLE>
<CAPTION>
JUNE 1998
---------
<S> <C>
OPERATIONAL DATA
Production (thousands of tonnes)............................ 5.4
Sales (thousands of tonnes)
Domestic.................................................. 3.0
Export.................................................... 0.0
-------
Total............................................. 3.0
Finished Goods Inventory (thousands of tonnes).............. 5.3
Average Selling Price (US$ per MT)(2)(9)(10)................ 536
Cash Conversion Costs (US$ per MT)(2)(9)(10)................ 45
nP (US$ per MT)(2)(3)(9)(10)................................ 229
STATEMENT OF PROFIT AND LOSS DATA
(RP. IN BILLIONS)
Sales Revenue............................................... 24.0
Operating Income (Loss)..................................... 5.3
Net Income (Loss)........................................... (844.8)
EBITDA(4)(9)................................................ (806.7)
Adjusted EBITDA(5)(9)....................................... 14.7
BALANCE SHEET DATA
(RP. IN BILLIONS EXCEPT OTHERWISE STATED)
Rupiah Unrestricted cash.................................... 164.6
Dollar unrestricted cash (US$ in millions).................. 0.4
Total unrestricted cash and cash equivalents(6)... 170.0
Trade Receivables........................................... 30.9
Trade Payables & Accruals due to BP......................... 123.0
Trade Payables & Accruals due to others..................... 14.2
Total Trade Payables & Accrual.................... 137.2
Short Term Debt(7).......................................... 480.2
Long Term Debt(8)........................................... 3,020.0
Exchange Rate (Rp. to US$1.00)(10)(full Rupiah)............. 14,900
</TABLE>
- ---------------
(2) to (10) are references to footnotes in the 1997 20-F
Operating Activities
The following supplements the discussion in the 1997 20-F which appears at
Item 9 -- "Developments in 1998 -- Selected Financial and Operational Data for
the First Five Months in 1998" and should be read in conjunction with that
discussion.
While the Guarantor had anticipated continuing operations through mid-July,
it determined to shut down the Plant on July 7, 1998 and to continue the
shutdown until propylene is again available from the Pertamina Refinery, now
anticipated for the end of July. The shutdown is in accord with the Guarantor's
cash enhancement and conservation objectives in that it believes that, based
upon its current inventory position, margins do not currently justify continued
use of imported propylene.
In connection with the above, the Guarantor has commenced negotiations with
BP Chemicals and Pertamina to modify the pricing formula under its Propylene
Supply Contract with BP Chemicals which, if agreed, will provide for pricing
based upon the South East Asian spot price for propylene less a transportation
discount. If agreed, the modification will have the effect of bringing the
Guarantor's feedstock costs better into
7
<PAGE> 11
line with South East Asian polypropylene prices and thereby enable the Guarantor
to export products in the current circumstances with a reasonable margin. There
can be no assurance, however, that the modification will be agreed or even if
agreed conditions will not change in a manner which vitiates its anticipated
positive effect.
Polytama II
The following supplements the discussion in the 1997 20-F which appears at
Item 9 -- "Developments in 1998 -- Recent Developments Regarding Polytama II"
and should be read in conjunction with that discussion.
The Guarantor has received a written request from the management of
Polytama II to acknowledge that the Guarantor has an obligation to pay $5.74
million to Polytama II. The Guarantor and Polytama II are engaged in discussions
in an attempt to resolve this issue to their mutual satisfaction.
In the 1997 20-F, the Guarantor indicated that it is currently working with
its Indonesian counsel and other relevant parties to clarify the extent of the
Guarantor's obligations, if any, in respect of Polytama II's obligations. As
part of this effort, the Guarantor has determined that certain arrangements were
purportedly entered into by Polytama II during a period in its formation which
under Indonesia law provides for potential liability of Polytama II's "founders"
unless these arrangements are later ratified by Polytama II after its
incorporation. The "founders" of Polytama II consist of its existing
shareholders, including the Guarantor. The arrangements entered into by Polytama
II during the "founding" period have not as yet been ratified by Polytama II,but
the Guarantor believes that this will be accomplished with deliberate speed. No
assurance can be given, however, that the other shareholders of Polytama II will
act in concert with the Guarantor to have Polytama II ratify these arrangements.
In the absence of such ratification, if such arrangements are found to be a
legally binding commitment of the founders of Polytama II under Indonesian law
and if the amounts invoiced to Polytama II in accordance with these arrangements
are found to be appropriate and within the contemplation of such legally binding
commitment, then the Guarantor, together with the other shareholders of Polytama
II, would be liable for such amounts. These account for a substantial portion of
the approximately $45.8 million invoiced to Polytama II by third parties which
remain unpaid.
If payment for the $5.74 million were held to be an obligation of the
Guarantor or if payment for the third party invoices referred to above were held
to be valid and an obligation of the Guarantor and in either case were pursued
and not duly paid, the Guarantor could become the subject of proceedings for the
enforcement of creditors' rights, including bankruptcy proceedings, under
Indonesian law.
THE PROPOSED AMENDMENTS
Holders are referred to the Indenture and the form of the Supplemental
Indenture for the full and complete terms of the Proposed Amendments. The form
of the Supplemental Indenture is attached hereto as Annex A and solely for the
convenience of the reader, a comparison of the provisions of the Indenture
affected by the Proposed Amendments is included herein as Annex B. Copies of the
Indenture are available from the Information Agent upon request.
THE CONSENT SOLICITATION
GENERAL
The Proposed Amendments will become effective only upon (i) delivery to the
Trustee of valid and unrevoked consents to the Proposed Amendments from Holders
of 100% of the aggregate principal amount of the Notes outstanding as of the
Record Date, (ii) execution of the Supplemental Indenture by the Issuer, the
Guarantor and the Trustee, and (iii) the satisfaction or waiver of certain other
conditions. See "The Consent Solicitation -- Conditions to the Consent
Solicitation." The Issuer and the Guarantor intend to execute the Supplemental
Indenture after receipt of the Requisite Consents on or before the Expiration
Date. If the
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<PAGE> 12
Consent Solicitation is terminated for any reason before the Expiration Date or
the other conditions to the Consent Solicitation are neither satisfied nor
waived, the Consents will be void.
Failure to deliver a Consent Form will have the same effect as if a Holder
had chosen not to give its consent with respect to the Proposed Amendments. The
delivery of a Consent Form will not affect a Holder's right to sell or transfer
the Notes.
Beneficial owners of Notes who wish to provide a consent and whose Notes
are held, as of the Record Date, in the name of a broker, dealer, commercial
bank, trust company or other nominee institution must contact such nominee
promptly and instruct such nominee, as the Holder of such Notes, to promptly
execute and deliver a Consent Form on behalf of the beneficial owner on or prior
to the Expiration Date.
Consents may be revoked at any time prior to the Expiration Date, and shall
be irrevocable, except as otherwise provided, from and after such time.
RECORD DATE
The Record Date for the determination of Holders entitled to give consents
pursuant to the Consent Solicitation is 5:00 p.m., New York City time, on July
9, 1998. The Issuer reserves the right to establish from time to time any new
date as such Record Date and, thereupon, any such new date will be deemed to be
the "Record Date" for purposes of the Consent Solicitation.
REQUISITE CONSENTS
Holders of Notes as of the Record Date must deliver (and not revoke) valid
consents in respect of 100% in aggregate principal amount of the Notes
outstanding as of the Record Date in order to approve the Proposed Amendments.
For purposes of the foregoing calculation, as of the date of this Consent
Solicitation Statement, none of the outstanding Notes were held by the Issuer,
the Guarantor or any of their respective affiliates.
The failure of a Holder of Notes as of the Record Date to deliver a consent
(including any failures resulting from broker non-votes) will have the same
effect as if such Holder had not consented to the Proposed Amendments.
EXPIRATION DATE; EXTENSIONS; AMENDMENT
The term "Expiration Date" with respect to the Consent Solicitation means
5:00 p.m., New York City time, on August 10, 1998, unless the Issuer, in its
discretion, extends the period during which the Consent Solicitation is open, in
which case the term "Expiration Date" means the latest date and time to which
such Consent Solicitation is extended.
In order to extend the Expiration Date, the Issuer will give notice of such
extension. An extension of the Expiration Date shall be effective if the
Guarantor gives oral or written notice thereof to the Trustee no later than 9:00
a.m. (and, if such notice is given orally, followed by written notice to the
Trustee (given by facsimile or otherwise) no later than 2:00 p.m.), New York
City time, on the first business day following any previously announced
Expiration Date. The Issuer may extend the Consent Solicitation on a daily basis
or for such specified period of time as it determines in its discretion.
If the Consent Solicitation is amended or modified in any manner by the
Issuer, it will promptly notify Holders who have received this Consent
Solicitation Statement and the accompanying Consent Form and extend the Consent
Solicitation for an adequate period to permit consents to be delivered or
revoked.
Notwithstanding anything to the contrary set forth in this Consent
Solicitation Statement, the Issuer reserves the right, in its discretion and
regardless of whether any of the conditions described below under "-- Conditions
to the Consent Solicitation" have been satisfied, subject to applicable law, at
any time prior to the Expiration Date to: (i) terminate the Consent Solicitation
upon the failure to meet a condition specified herein or for any other reason;
(ii) waive any of the conditions to the Consent Solicitation; (iii) extend the
Expiration Date; or (iv) amend the terms of the Consent Solicitation.
9
<PAGE> 13
PROCEDURES FOR CONSENTING
All Consent Forms that are properly executed and delivered to the
Information Agent prior to the Expiration Date and not timely and properly
revoked will be given effect in accordance with the specifications therein.
Holders who desire to act with respect to the Proposed Amendments should so
indicate by marking the appropriate box in, and signing and dating, the
accompanying Consent Form included herein and delivering it to the Information
Agent at the addresses set forth in the Consent Form, in accordance with the
instructions contained herein and therein. If none of the boxes in the Consent
Form is checked, but the Consent Form is otherwise completed and signed, the
Holder will be deemed to have consented to the Proposed Amendments. Signatures
must be guaranteed in accordance with paragraph 6 of the Instructions in the
Consent Form.
The Consent Form must be executed in exactly the same manner as the name of
the Holder which appears on the Notes. An authorized DTC Participant must
execute the Consent Form exactly as its name appears on DTC's position listing
as of the Record Date. If the Notes are held of record by two or more joint
Holders, all such Holders must sign the Consent Form. If a signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and must submit proper evidence
satisfactory to the Issuer of such person's authority to so act. If the Notes
are registered in different names, separate Consent Forms must be executed
covering each form of registration. If a Consent Form is executed by a person
other than the Holder, then such person must have been authorized by proper form
or in some other manner acceptable to the Issuer to execute the Consent Form
with respect to the applicable Notes on behalf of the Holder.
Any beneficial owner of the Notes who is not the Holder of such Notes must
arrange with the person who is the Holder or such Holder's assignee or nominee
to execute and deliver a Consent Form on behalf of such beneficial owner.
Each consent will be deemed to relate to the full principal amount of the
Notes held by such Holder.
A Holder must complete, sign and date the Consent Form (or photocopy
thereof) for such Holder's Notes and deliver such Consent Form to the
Information Agent by mail, first-class postage prepaid, hand delivery, overnight
courier or by facsimile transmission (with an original to be delivered
subsequently) at the addresses or facsimile numbers of the Information Agent set
forth on the back cover page hereof. Delivery of Consent Forms should be made
sufficiently in advance of the Expiration Date to assure that the Consent Forms
are received prior to the Expiration Date (and, in the case of facsimile
transmission, that original Consent Forms are received by the Issuer prior to
5:00 p.m., New York City time, on the third business date following the
Expiration Date). Under no circumstances should any person tender or deliver
Notes to the Issuer, the Guarantor, the Procedural Advisor, the Trustee or the
Information Agent at any time.
The Issuer reserves the right to accept Consent Forms delivered by any
other reasonable means or in any form that reasonably evidences the giving of
consent.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of consents and revocations of consents will be resolved
by the Issuer whose determination will be binding. The Issuer reserves the
absolute right to reject any or all consents and revocations that are not in
proper form or the acceptance of which could, in the opinion of the Issuer's
counsel, be unlawful. The Issuer also reserves the right to waive any
irregularities in connection with deliveries which must be cured within such
time as the Issuer determines. None of the Issuer, the Guarantor, the Procedural
Advisor, the Trustee, the Information Agent or any other person shall have any
duty to give notification of any such irregularities or waiver, nor shall any of
them incur any liability for failure to give such notification. Deliveries of
Consent Forms or notices of revocation will be not deemed to have been made
until such irregularities have been cured and waived.
10
<PAGE> 14
REVOCATION OF CONSENTS
Each properly completed and executed consent will be counted in determining
whether the Requisite Consents have been received, notwithstanding any transfer
of the Notes to which such consent relates, unless the procedure for revocation
of Consents described below has been followed.
Each Holder as of the Record Date who has delivered a consent pursuant to
the Consent Solicitation will agree in the Consent Form that it will not revoke
its consent after receipt by the Trustee of the Requisite Consents, and that
until such time such Holder will not revoke its consent except in accordance
with the conditions and procedures for revocation of Consents provided below.
Prior to the Requisite Consent Date, any Holder as of the Record Date may
revoke any consent given as to its Notes or any portion of such Notes (in
integral multiples of US$1,000). A consent shall be irrevocable from and after
the Requisite Consent Date. A Holder desiring to revoke a consent must, prior to
the Requisite Consent Date, deliver to the Information Agent at the addresses
set forth on the back cover page of this Consent Solicitation Statement, written
revocation of such consent containing the name of such Holder, the certificate
numbers (if held in certificated form) or the CUSIP numbers (if held through
DTC) of the notes to which such revocation relates, and the principal amount of
the Notes to which such revocation relates. Revocations of Consent Forms shall
be effective upon receipt by the Information Agent.
The revocation must be executed by such Holder in the same manner as the
Holder's name appears on the consent to which the revocation relates. If a
revocation is signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person must so indicate when signing and must
submit with the revocation appropriate evidence of authority to execute the
revocation. A Holder may revoke a consent only if such revocation complies with
the provisions of this Consent Solicitation. Only a Holder of Notes as of the
Record Date is entitled to revoke a consent previously given. A beneficial owner
of Notes held through a DTC Participant as of the Record Date must instruct such
DTC Participant to revoke any consent already given with respect to such Notes.
A revocation that is not received by the Information Agent in a timely fashion
and accepted by the Issuer as a valid revocation will not be effective to revoke
a consent previously given.
A revocation of a consent may only be rescinded by the execution and
delivery of a new consent, in accordance with the procedures herein described,
by the Holder who delivered such revocation.
The Issuer reserves the right to contest the validity of any revocation and
all questions as to validity (including time of receipt) of any revocation will
be determined by the Issuer in its discretion, which determination will be
conclusive and binding. None of the Issuer, the Guarantor or any of their
respective affiliates, the Trustee, the Procedural Advisor, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities with respect to any revocation nor shall any of them
incur any liability for failure to give such notification.
CONDITIONS TO THE CONSENT SOLICITATION
The Consent Solicitation is conditioned on the satisfaction of (i) the
Requisite Consent Condition, (ii) the execution of the Supplemental Indenture
and (iii) the absence of any law or regulation which would, and the absence of
any injunction or action or other proceeding (pending or threatened) which (in
the case of any action or proceeding adversely determined) would, make unlawful
or invalid or enjoin the implementation of the Proposed Amendments, the entering
into of the Supplemental Indenture or challenge the legality or validity
thereof.
If any of the conditions are not satisfied on or prior to the Expiration
Date, the Issuer may, in its discretion and upon giving reasonable notice to the
Holders, allow the Consent Solicitation to lapse or extend the solicitation
period and continue soliciting consents pursuant to the Consent Solicitation.
The Consent Solicitation may be abandoned or terminated at any time prior to the
Expiration Date by the Issuer, for any reason, in which case any Consents
received will be voided.
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<PAGE> 15
FEES AND EXPENSES
The Guarantor has retained Chase Securities Inc. to act as procedural
advisor (the "Procedural Advisor") to the Guarantor, including in connection
with the Consent Solicitation, and Corporate Investor Communications, Inc. to
act as its information agent (the "Information Agent") in connection with the
Consent Solicitation. The Guarantor will bear the costs of the Consent
Solicitation. The Guarantor has agreed to pay the Information Agent customary
fees for its services in connection with the Consent Solicitation and to
reimburse the Procedural Advisor and the Information Agent for their
out-of-pocket expenses. The Issuer and the Guarantor have also agreed to
indemnify the Procedural Advisor and the Information Agent against certain
liabilities relating to the Consent Solicitation. No fee is to be paid to the
Procedural Advisor.
12
<PAGE> 16
CERTAIN INCOME TAX CONSIDERATIONS
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences associated with the adoption of the Proposed Amendments. This
summary is based upon existing United States federal income tax law, which is
subject to change, possibly retroactively. This summary does not discuss all
aspects of United States federal income taxation which may be important to
particular holders in light of their individual investment circumstances, such
as Notes held by investors subject to special tax rules (e.g., financial
institutions, insurance companies, broker-dealers, tax-exempt organizations, or,
except to the extent described below, Non-U.S. Holders (as defined below)) or to
persons that hold the Notes as a part of a straddle, hedge, or synthetic
security transaction for United States federal income tax purposes or that have
a functional currency other than the United States dollar, all of whom may be
subject to tax rules that differ significantly from those summarized below. In
addition, this summary does not discuss any foreign, state, or local tax
considerations. This summary assumes that investors hold their Notes as "capital
assets" (generally, property held for investment) under the United States
Internal Revenue Code of 1986, as amended (the "Code"). Holders are urged to
consult their tax advisors regarding the United States federal, state, local and
foreign income and other tax considerations associated with the adoption of the
Proposed Amendments.
For purposes of this summary, a "U.S. Holder" is a beneficial owner of a
Note that is (i) an individual who is a citizen or resident of the United
States, (ii) a corporation or partnership created or organized under the laws of
the United States or any state or political subdivision thereof, (iii) an estate
that is subject to United States federal income taxation without regard to the
source of its income, or (iv) a trust the administration of which is subject to
the primary supervision of a United States court and which has one or more
United States persons who have the authority to control all substantial
decisions of the trust. A "Non-U.S. Holder" is a beneficial owner of a Note who
is not a U.S. Holder.
CAPSULE SUMMARY FOR U.S. HOLDERS AND NON-U.S. HOLDERS
Adoption of Proposed Amendments
Subject to the assumptions set forth herein, both U.S. Holders and Non-U.S.
Holders will generally not recognize any gain or loss on either the adoption of
the Proposed Amendments or the receipt of the Pro Rata Principal Repayment. U.S.
Holders who have purchased their Notes subsequent to the initial offering of the
Notes at a Market Discount (as defined below), however, will recognize gain in
an amount equal to the excess of (i) the amount of the Pro Rata Principal
Repayment received by such holder over (ii) the portion of such holder's
adjusted tax basis in the Note allocable to the portion of the principal amount
of Note that is retired. Such gain will be capital gain, except to the extent of
accrued market discount subject to tax as ordinary income that has not been
previously included in ordinary income.
Original Issue Discount -- Payment of Interest in Additional Securities
Assuming that the Issuer elects to issue additional Notes in lieu of the
payment of interest in cash, U.S. Holders will be required, effectively, to
include in income as original issue discount, subject to tax as ordinary
interest income, an amount equal to the aggregate stated principal amount of the
additional Notes issued, reduced by any Excess Yield (as defined below), in lieu
of interest paid in cash during the period that the right to receive the
additional Notes accrues. Thereafter, the amount of original issue discount
includible in income during a complete calendar year should be equal to the
amount of scheduled interest payments made during such year plus any Excess
Yield. The actual receipt of scheduled interest payments, however, will not be
subject to United States federal income taxation.
13
<PAGE> 17
U.S. HOLDERS
General
The United States federal income tax consequences of the adoption of the
Proposed Amendments will depend on, inter alia, whether the Notes are "publicly
traded" as specially determined for United States federal income tax purposes,
within a 60 day period ending 30 days after the adoption of the Proposed
Amendments. The Issuer believes that the Notes have not been so publicly traded
and the Issuer does not presently anticipate, and the remainder of this
discussion assumes, that the Notes will not become publicly traded on or prior
to the 30th day following the adoption of the Proposed Amendments.
Pro-rata Principal Repayment
The Issuer believes that the Pro Rata Principal Repayment on the Notes
should be treated, for United States federal income tax purposes, as a repayment
of a portion of the principal amount of the Notes and the remainder of this
discussion assumes that such treatment will be respected by the United States
Internal Revenue Service.
Original Purchasers and Certain Subsequent Purchasers. A U.S. Holder who is
either (i) an original purchaser of Notes or (ii) a subsequent purchaser of
Notes who did not purchase the Notes at a Market Discount (as defined below)
will not recognize any gain or loss upon the receipt of the Pro Rata Principal
Repayment. The adjusted tax basis of the Notes in the hands of such U.S. Holder
will be decreased by the amount of the Pro Rata Principal Repayment received by
such holder.
Subsequent Purchasers -- Market Discount. Under the pro rata prepayment
rules of the United States Treasury regulations, a U.S. Holder who purchased a
Note subsequent to the initial offering of the Notes at a "market discount"
(i.e., at purchase price that was less than the adjusted issue price of the
Notes) in excess of a statutorily defined de minimis amount (a "Market
Discount") will be treated as having received the Pro Rata Principal Repayment
in retirement of a portion of the principal amount of the Note equal to the Pro
Rata Principal Repayment received by such holder. As a result, such holder will
recognize gain in an amount equal to the excess of (i) the amount of the Pro
Rata Principal Repayment received by such holder over (ii) the portion of such
holder's adjusted tax basis in the Note allocable to the portion of the
principal amount of Note that is retired. Such gain will be capital gain, except
to the extent of accrued market discount subject to tax as ordinary income in
respect of which the holder has not previously elected to include in ordinary
income on a current basis. The adjusted tax basis of the portion of the
principal amount of the Note that remains outstanding will be equal to the
adjusted tax basis of such Note as determined immediately prior to the receipt
of the Pro Rata Principal Repayment less the adjusted tax basis allocable to the
retired portion of the principal amount as described above.
Significant Modification Rules
The modification of a debt instrument will result in a "deemed exchange" of
an old debt instrument for a new debt instrument, for United States federal
income tax purposes, if, taking into account all of the relevant facts and
circumstances, such modification constitutes a "significant modification." The
Issuer believes that, for United States federal income tax purposes, the
adoption of the Proposed Amendments should not constitute a significant
modification of the Notes -- and, accordingly, that the modification should not
be treated as a "deemed exchange" of old Notes for new Notes -- because such
adoption (i) will merely have the effect, overall, of extending the weighted
average maturity of the Notes, but will not extend the stated term to maturity
of the Notes and (ii) will not materially alter the yield to maturity of the
Notes. It is possible, however, that the Internal Revenue Service may
successfully assert that adoption of the Proposed Amendments constitutes a
deemed exchange of old Notes for new Notes. See "-- Alternative
Treatment -- Deemed Exchange of Old Notes for New Notes" below.
14
<PAGE> 18
Original Issue Discount
Because the Company may, as a result of the adoption of the Proposed
Amendments, elect to issue additional Notes in lieu of the payment of interest
in cash on the Notes as described above under the heading "Purpose of Consent
Solicitation -- Effect of Proposed Amendments," the Notes will be deemed to be
"reissued," solely for purposes of the application of the original issue
discount rules of the Code, as of the date of the adoption of the Proposed
Amendments. Consequently, U.S. Holders will be required to include original
issued discount in ordinary income over the period that they hold the Notes in
advance of the receipt of cash attributable thereto.
If the Issuer elects to issue additional Notes in lieu of the payment of
interest in cash, the amount of original issue discount includible in income
during the taxable period that the right to receive the additional Notes accrues
should be generally equal to the aggregate stated principal amount of such
additional Notes reduced by any "Excess Yield" as described immediately below.
If the Issuer elects to issue additional Notes in lieu of the payment of cash
due on December 15, 1999, the principal amount of such Notes in respect of the
annualized yield that exceeds 11.25% (the "Excess Yield") will not be currently
includible income but, effectively, will be amortized into income over the
remaining term of the Notes. Thereafter, the amount of original issue discount
includible in income during a complete calendar year should be equal to the
amount of scheduled interest payments made during such year plus the amortized
amount, if any, of Excess Yield.
Generally, the amount of original issue discount on the Notes will be equal
to the excess of (i) the sum of the principal amount due at maturity, the
principal amount of the additional Notes, plus all scheduled interest payments
over (ii) the adjusted issue price of the Notes (after taking into account the
reduction of issue price resulting from the Pro Rata Principal Repayment as
described above). The amount of original issue discount to be included in income
will be determined using a constant yield method. Any amount of discount
included in income will increase a U.S. Holder's adjusted tax basis in the Notes
and any scheduled payments of interest in cash will decrease such holder's
adjusted tax basis in the notes. The receipt of such cash interest payments will
not be subject to United States federal income tax.
Alternative Treatment -- Deemed Exchange of Old Notes for New Notes
If the Internal Revenue Service were to successfully assert that the
adoption of the Proposed Amendments constitutes a "significant modification,"
and, accordingly, a deemed exchange of old Notes for new Notes, the Company
believes that such deemed exchange would qualify as a "tax-free
recapitalization" under the Code. Accordingly, U.S. Holders would (i) not
recognize any gain or loss as a result of such deemed exchange, (ii) have an
adjusted tax basis in the new Notes equal to the adjusted tax basis (after
taking into account the reduction of basis resulting from the Pro Rata Principal
Repayment) in the old Notes deemed received in exchange therefor, and (iii) have
a holding period for the new Notes that includes the holding period of the old
Notes. The issue price of the new Notes would be equal to their stated principal
amount (i.e., an amount equal to the stated principal amount of the old Notes
after taking into account a reduction in such principal amount resulting from
the Pro Rata Principal Repayment). In addition, the new Notes would be deemed to
be issued with original issue discount and U.S. Holders of new Notes would be
required to include such discount in income on a current basis as described
above under the heading "-- U.S. Holders -- Original Issue Discount."
NON-U.S. HOLDERS
The adoption of the Proposed Amendments and the receipt of the Pro Rata
Principal Repayment will not give rise to any United States federal income tax
consequences to a Non-U.S. Holder unless (i) the interest or Pro Rata Principal
Repayment received on, or any gain recognized on the sale or other disposition
of, the Notes by such holder is treated as effectively connected with the
conduct by such holder of a trade or business in the United States or (ii) in
the case of any gain derived by an individual, such individual is present in the
United States for 183 days or more and certain other requirements are met.
In order to avoid back-up withholding on payments of interest, the Pro Rata
Principal Repayment, and other repayments of principal on the Notes made in the
United States, a non-U.S. holder of the Notes may be
15
<PAGE> 19
required to complete, and provide the payor with, a Form W-8 ("Certificate of
Foreign Status"), or other documentary evidence, certifying that such holder is
an exempt foreign person.
INDONESIAN TAXATION
In general, beneficial owners of the Notes that are not Indonesian citizens
or residents or Indonesian permanent establishments ("Non-Indonesian Holders")
will not be subject to Indonesian income tax on modification of the terms of the
Notes.
THE NETHERLANDS TAX CONSIDERATIONS
The following is a summary of taxes imposed by The Netherlands. The summary
does not address any laws other than the tax laws of The Netherlands in force
and in effect as of the date hereof.
The additional securities that may be issued in lieu of payment of interest
in cash on the Notes, as described above under the heading "Purpose of Consent
Solicitation -- Effect of Proposed Amendments," are referred to as the
"Additional Securities" for purposes of this section on Netherlands taxation.
Withholding Tax
All payments under the Notes and the Additional Securities, whether made in
cash or in kind, may be made free of withholding or deduction of, for or on
account of any taxes of whatever nature imposed, levied, withheld or assessed by
The Netherlands or any political subdivision or taxing authority thereof or
therein.
Taxes on Income and Capital Gains
A holder of Notes or Additional Securities will not be subject to any
Netherlands taxes on income or capital gains in respect of any payment under the
Notes or the Additional Securities, whether made in cash or in kind, or in
respect of any gain realized on the disposal or the redemption of the Notes or
the Additional Securities, provided that:
(i) such holder is neither resident nor deemed to be resident in The
Netherlands; and
(ii) such holder does not have an enterprise or an interest in an
enterprise that is, in whole or in part, carried on through a permanent
establishment or a permanent representative in The Netherlands and to which
enterprise or part of an enterprise, as the case may be, the Notes or
Additional Securities are attributable; and
(iii) such holder does not have substantial interest or a deemed
substantial interest in the Issuer or, if such holder does have such an
interest, it forms part of the assets of an enterprise.
Generally, a holder of Notes or Additional Securities will not have a
substantial interest if he, his spouse, certain other relatives (including
foster children) or certain persons sharing his household, do not hold, alone or
together, whether directly or indirectly, the ownership of, or certain other
rights over, shares representing five percent or more of the total issued and
outstanding capital (or the issued and outstanding capital of any class of
shares) of the Issuer, or rights to acquire shares, whether or not already
issued, that represent at any time (and from time to time) five percent or more
of the total issued and outstanding capital (or the issued and outstanding
capital of any class of shares) of the Issuer or the ownership of certain profit
participating certificates that relate to five percent or more of the annual
profit of the Issuer and/or to five percent or more of the liquidation proceeds
of the Issuer. A deemed substantial interest is present if (all or part of) a
substantial interest has been disposed of, or is deemed to have been disposed
of, on a non-recognition basis.
A holder of Notes or Additional Securities will not be subject to taxation
in The Netherlands by reason only of the execution and delivery of the Consent
Form, the issue of the Notes or the Additional Securities by the Issuer, or the
performance by the Issuer of its obligations under the Notes or the Additional
Securities.
16
<PAGE> 20
Net Wealth Tax
A holder of Notes or Additional Securities will not be subject to
Netherlands net wealth tax in respect of the Notes or the Additional Securities,
provided that such holder is not an individual or, if he is an individual,
provided that the conditions mentioned under clauses (i) and (ii) of the proviso
under "Taxes on Income and Capital Gains" above are met.
Gift, Estate and Inheritance Taxes
No gift, estate or inheritance taxes will arise in the Netherlands with
respect to the acquisition of Notes or Additional Securities by way of a gift
by, or on the death of, a holder of Notes or Additional Securities who is
neither resident nor deemed to be resident in The Netherlands, unless:
(i) such holder at the time of the gift has or at the time of his
death had an enterprise or an interest in an enterprise that is or was, in
whole or in part, carried on through a permanent establishment or a
permanent representative in The Netherlands and to which enterprise or part
of an enterprise, as the case may be, the Notes or the Additional
Securities are or were attributable; or
(ii) in the case of a gift of Notes or Additional Securities by an
individual who at the date of the gift was neither resident nor deemed to
be resident in The Netherlands, such individual dies within 180 days after
the date of the gift, while being resident or deemed to be resident in The
Netherlands.
Turnover Tax
No Netherlands turnover tax will arise in respect of any payment in
consideration for the issue of the Notes or the Additional Securities or with
respect to any payment by the Issuer of principal, interest or premium (if any)
on the Notes or the Additional Securities.
Capital Tax
No Netherlands capital tax will be payable in respect of or in connection
with the execution, delivery and/or enforcement by legal proceedings (including
the enforcement of any foreign judgment in the Courts of The Netherlands) of the
Consent Form, or the performance by the Issuer of its obligations under the
Notes or the Additional Securities, with the exception of capital tax that may
be due by the Issuer on capital contributions made or deemed to be made to the
Issuer under the Guarantee.
Other Taxes and Duties
No Netherlands registration tax, custom duty, transfer tax, stamp duty or
any other similar documentary tax or duty, other than court fees, will be
payable in The Netherlands in respect of or in connection with the execution,
delivery and/or enforcement by legal proceedings (including the enforcement of
any foreign judgment in the Courts of The Netherlands) of the Consent form, or
the performance by the Issuer of its obligations under the Notes or the
Additional Securities.
17
<PAGE> 21
MISCELLANEOUS
The Consent Solicitation is not being made to, and Consent Forms will not
be accepted from or on behalf of, any Holder in any jurisdiction in which the
making of the Consent Solicitation to such Holder or the acceptance thereof from
such Holder would not be in compliance with the laws of such jurisdiction.
However, the Issuer may in its discretion take such action as it may deem
necessary to make the Consent Solicitation in any such jurisdiction and to
extend the Consent Solicitation to Holders in such jurisdiction.
HOLDERS WHO WISH TO CONSENT SHOULD DELIVER, BY REGULAR MAIL, AIR COURIER,
MESSENGER OR FAX, THEIR PROPERLY COMPLETED, EXECUTED AND DATED CONSENT FORMS TO
THE INFORMATION AGENT IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH HEREIN AND
THEREIN. ALL FACSIMILE TRANSMISSIONS MUST BE FOLLOWED BY DELIVERY OF ORIGINALLY
EXECUTED CONSENTS. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CONSENTS,
IS AT THE ELECTION AND RISK OF THE HOLDER. THE ADDRESS OF THE INFORMATION AGENT
AS FOLLOWS:
Via Regular Mail or By Hand or Overnight Delivery
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
Contact Persons: Paul Hebert or Chris Dowd
Facsimile Transmission:
(201) 804-8693
(Originally executed consents must follow)
Confirm by Telephone
(201) 896-1900 or Call Toll Free (800) 346-7885
NEITHER THE ISSUER NOR THE GUARANTOR HAS AUTHORIZED ANY PERSON TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION IN CONNECTION WITH THIS SOLICITATION OF
CONSENTS OTHER THAN AS SET FORTH HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
ISSUER OR THE GUARANTOR. THE DELIVERY OF THIS CONSENT SOLICITATION STATEMENT
SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
HEREIN IS CORRECT AFTER THE DATE HEREOF.
Any questions or requests for assistance or additional copies of this
Consent Solicitation Statement or the Consent may be directed to the Information
Agent at its telephone number and location set forth above. For assistance in
completing the forms, you may also contact the Information Agent at the
telephone number and location set forth above.
18
<PAGE> 1
CONSENT FORM
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
FORM FOR CONSENTING TO THE PROPOSED AMENDMENTS
PURSUANT TO THE CONSENT SOLICITATION STATEMENT DATED JULY 13, 1998
relating to
11 1/4% GUARANTEED SECURED NOTES DUE 2007
issued by
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 principal amount outstanding)
Irrevocably and Unconditionally Guaranteed as to Payment of Principal,
Premium, Interest and Additional Amounts, if any, by
P.T. POLYTAMA PROPINDO
TO: INFORMATION AGENT
CORPORATE INVESTOR COMMUNICATIONS, INC.
THE CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON AUGUST 10,
1998, UNLESS EXTENDED (AS SO EXTENDED, THE "EXPIRATION DATE"). IF THE REQUISITE
CONSENTS WITH RESPECT TO THE CONSENT SOLICITATION HAVE NOT BEEN RECEIVED BY 5:00
P.M., NEW YORK TIME, ON THE EXPIRATION DATE, THE ISSUER MAY EXTEND THE CONSENT
SOLICITATION FOR A SPECIFIED PERIOD OR ON A DAILY BASIS UNTIL THE REQUISITE
CONSENTS HAVE BEEN RECEIVED.
Via Regular Mail or By Hand or Overnight Delivery
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
Contact Persons: Paul Hebert or Chris Dowd
Personal and Confidential
The Consent Solicitation is made by Polytama International Finance B.V. (the
"Issuer") and by P.T. Polytama Propindo (the "Guarantor") only to Holders (as
defined below) of the 11 1/4% Guaranteed Secured Notes due 2007 (the "Notes") of
the Issuer and irrevocably and unconditionally guaranteed as to Payment of
Principal, Premium, Interest and Additional Amounts, if any, by the Guarantor,
as described in the accompanying Consent Solicitation Statement dated July 13,
1998 (the "Consent Solicitation Statement"). The term "Holder" as used herein
means any holder of record of the Notes as of 5:00 p.m., New York City time, on
July 9, 1998 (the "Record Date"). Capitalized terms used herein but not defined
herein have the meanings given to them in the Consent Solicitation Statement.
The Consent Solicitation expires at 5:00 p.m., New York City time on August 10,
1998, unless extended.
HOLDERS WHO WISH TO CONSENT MUST DELIVER THEIR PROPERLY COMPLETED AND
EXECUTED CONSENT FORMS BY MAIL, FIRST-CLASS POSTAGE PREPAID, HAND DELIVERY,
OVERNIGHT COURIER OR BY FACSIMILE TRANSMISSION (WITH AN ORIGINAL TO BE DELIVERED
SUBSEQUENTLY) TO THE INFORMATION AGENT (NOT TO THE ISSUER, THE GUARANTOR OR THE
TRUSTEE) AT THE ADDRESS OR NUMBERS SET FORTH ABOVE IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH HEREIN AND IN THE CONSENT SOLICITATION STATEMENT.
HOWEVER, THE ISSUER RESERVES THE RIGHT TO ACCEPT ANY CONSENT RECEIVED BY THE
TRUSTEE. UNDER NO CIRCUMSTANCES SHOULD ANY PERSON TENDER OR DELIVER NOTES TO THE
ISSUER, THE GUARANTOR OR THE TRUSTEE AT ANY TIME.
Only Holders are eligible to consent to the Proposed Amendments. Any
beneficial owner of the Notes who is not a Holder of such Notes must arrange
with the person who is the Holder or such Holder's assignee or nominee to
execute and deliver a Consent Form on behalf of such beneficial owner. FOR
PURPOSES OF THE CONSENT SOLICITATION, THE DEPOSITORY TRUST COMPANY ("DTC") HAS
AUTHORIZED DTC PARTICIPANTS ("PARTICIPANTS") SET FORTH IN THE POSITION LISTING
OF DTC AS OF THE RECORD DATE TO EXECUTE CONSENT FORMS AS IF THEY WERE THE
HOLDERS OF THE NOTES HELD OF RECORD IN THE NAME OF DTC OR THE NAME OF ITS
NOMINEE. ACCORDINGLY, FOR PURPOSES OF THE CONSENT SOLICITATION, THE TERM
"HOLDER" SHALL BE DEEMED TO INCLUDE SUCH PARTICIPANT. The Issuer reserves the
right to establish from time to time any new date as the Record Date and,
thereupon, any such new date will be deemed to be the "Record Date" for purposes
of the Consent Solicitation.
By execution hereof, the undersigned acknowledges receipt of the Consent
Solicitation Statement. The undersigned hereby represents and warrants that the
undersigned is a Holder of the Notes indicated below and has full power and
authority to take the action indicated below in respect of such Notes. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Issuer to be necessary or desirable to perfect the undersigned's
consent.
The undersigned acknowledges that the undersigned must comply with the
provisions of this Consent Form, and complete the information required therein,
to validly consent to the Proposed Amendments set forth in the Consent
Solicitation Statement. The effectiveness of the Proposed Amendments is
conditioned on, among other things, (i) there being received (and not revoked)
on or prior to the Expiration Date (as defined below) the effective consent to
the Proposed Amendments by 100% of the aggregate principal amount of Notes that
are outstanding as of the Record Date and (ii) the execution of the related
First Supplemental Indenture (the "Supplemental Indenture") among the Issuer,
the Guarantor and the Trustee.
Please indicate by marking the appropriate box below whether you wish to (i)
consent to the Proposed Amendments or (ii) not consent to the Proposed
Amendments. The undersigned acknowledges that Consent Forms delivered pursuant
to any one of the procedures described under the heading "The Consent
Solicitation -- Procedures for Consenting" in the Consent Solicitation Statement
and in the instructions hereto will constitute a binding agreement among the
undersigned and the Issuer upon the terms and subject to the conditions of the
Consent Solicitation. The undersigned further understands that if no box is
checked, but this Consent Form is executed and delivered to the Information
Agent, the undersigned will be deemed to have consented to the Proposed
Amendments. The undersigned hereby agrees that it will not revoke any consent it
grants hereby except in accordance with the procedures set forth herein and in
the Consent Solicitation Statement. The giving of consent by a Holder shall
constitute a direction and instruction by such Holder to the Trustee to enter
into the Supplemental Indenture and to take the other actions contemplated by
the Consent Solicitation Statement.
[ ] CONSENT [ ] DO NOT CONSENT
1
<PAGE> 2
This Consent Form relates to the total principal amount of the Notes held
of record by the undersigned at the close of business on the Record Date.
The undersigned authorizes the Information Agent to deliver this Consent
Form and any proxy delivered in connection herewith to the Trustee as evidence
of the undersigned's action with respect to the Proposed Amendments.
With respect to actions taken in accordance with and pursuant to this
Consent, the Holder hereby agrees to, and shall, indemnify the Trustee and each
director, officer and employee of the Trustee (the Trustee and each such other
person being an "Indemnified Person") on demand for, and to indemnify and hold
harmless each such Indemnified Person from and against, without limitation, any
and all losses, liabilities, judgments, claims, causes of actions, costs and
expenses (including fees and disbursements of legal counsel) (collectively
referred to herein as "Losses") incurred or suffered by an Indemnified Person in
any way, directly or indirectly, arising out of, related to, or connected with
the compliance by the Trustee or any other Indemnified Person with this Consent
or the taking of action in accordance with this Consent or with entering into
the Supplemental Indenture.
The Holder agrees that (i) the terms of this Consent and the Indemnity
contained herein will be governed by and construed in accordance with the
substantive laws (and not the choice of law rules) of the State of New York and
(ii) all actions and proceedings relating to or arising from, directly or
indirectly, this Consent and the Indemnity contained herein may be brought by an
Indemnified Person in courts located within the State of New York.
This indemnity shall survive the termination of the Indenture and any
resignation of the Trustee.
DESCRIPTION OF GUARANTEED SECURED NOTES DUE 2007
OF
POLYTAMA INTERNATIONAL FINANCE B.V.
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
(CUSIP NUMBER 73180UAAO)
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF NOTE(S)
WITH
RESPECT TO WHICH CONSENTS ARE
AGGREGATE PRINCIPAL GIVEN
NAME AND ADDRESS OF HOLDER CERTIFICATE NUMBER(S)(1) AMOUNT OF NOTE(S)(2) (IN US$)
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT OF NOTES CONSENTING.............................. US$
- -----------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
Remarks:
(1) Need not be completed by Holders whose Notes are held of record by
depositories.
(2) The Holder will be deemed to have consented in respect of the entire
aggregate principal amount indicated in the column labeled "Aggregate
Principal Amount of Note(s)." All principal amounts must be in multiples of
US$1,000.
2
<PAGE> 3
IMPORTANT -- READ CAREFULLY
IF THIS CONSENT FORM IS EXECUTED BY THE HOLDER, IT MUST BE EXECUTED IN
EXACTLY THE SAME MANNER AS THE NAME OF THE HOLDER APPEARS ON THE NOTES. AN
AUTHORIZED DTC PARTICIPANT MUST EXECUTE THIS CONSENT FORM EXACTLY AS ITS NAME
APPEARS ON DTC'S POSITION LISTING AS OF THE RECORD DATE. IF THE NOTES ARE HELD
OF RECORD BY TWO OR MORE JOINT HOLDERS, ALL SUCH HOLDERS MUST SIGN THE CONSENT
FORM. IF A SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN,
ATTORNEY-IN-FACT, OFFICER OF A CORPORATION OR OTHER HOLDER ACTING IN A FIDUCIARY
OR REPRESENTATIVE CAPACITY, SUCH PERSON SHOULD SO INDICATE WHEN SIGNING AND MUST
SUBMIT PROPER EVIDENCE SATISFACTORY TO THE INFORMATION AGENT OF SUCH PERSON'S
AUTHORITY TO SO ACT. IF THE NOTES ARE REGISTERED IN DIFFERENT NAMES, SEPARATE
CONSENT FORMS MUST BE EXECUTED COVERING EACH FORM OF REGISTRATION. IF A CONSENT
FORM IS EXECUTED BY A PERSON OTHER THAN THE HOLDER, THEN SUCH PERSON MUST HAVE
BEEN AUTHORIZED BY PROXY OR IN SOME OTHER MANNER ACCEPTABLE TO THE ISSUER TO
VOTE THE APPLICABLE NOTES ON BEHALF OF THE HOLDER.
DESCRIPTION OF 11 1/4% GUARANTEED SECURED NOTES DUE 2007
POLYTAMA INTERNATIONAL FINANCE B.V.
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
(CUSIP NUMBER 73180UAAO)
SIGN HERE
- --------------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
- --------------------------------------------------------------------------------
DATE:
- --------------------------------------------------------------------------------
NAME(S) (PLEASE PRINT):
- --------------------------------------------------------------------------------
CAPACITY (FULL TITLE):
- --------------------------------------------------------------------------------
ADDRESS (INCLUDE ZIP CODE):
- --------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NO.:
- --------------------------------------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO:
- --------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED, SEE INSTRUCTIONS 5 AND 6 BELOW)
AUTHORIZED SIGNATURE:
- --------------------------------------------------------------------------------
NAME AND TITLE (PLEASE PRINT):
- --------------------------------------------------------------------------------
DATE:
- --------------------------------------------------------------------------------
NAME OF FIRM:
- --------------------------------------------------------------------------------
3
<PAGE> 4
INSTRUCTIONS FORMING PART
OF THE TERMS AND CONDITIONS OF THE CONSENT SOLICITATION
1. DELIVERY OF THIS CONSENT FORM.
Subject to the terms and conditions set forth herein and in the Consent
Solicitation Statement, a properly completed and duly executed copy of this
Consent Form and any other documents required by this Consent Form must be
received by the Information Agent (for delivery to the Trustee) at the addresses
or numbers set forth on the cover hereof on or prior to the Expiration Date
(provided that the expected original of each document sent by facsimile
transmission on or prior to the Expiration Date must be received by the
Information Agent at such addresses prior to 5:00 p.m., New York City time, on
the third business day following the Expiration Date). THE METHOD OF DELIVERY OF
THIS CONSENT FORM AND ALL OTHER REQUIRED DOCUMENTS TO THE INFORMATION AGENT IS
AT THE RISK OF THE HOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE INFORMATION AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE TIMELY DELIVERY. NO CONSENT FORM SHOULD BE SENT TO ANY
PERSON OTHER THAN THE INFORMATION AGENT.
Any beneficial owner of the Notes who is not a Holder of the Notes must
arrange with the person who is the Holder (e.g., held in the name of DTC or the
beneficial owner's broker, dealer, commercial bank, trust company or other
nominee institution) or such Holder's assignee or nominee to execute and deliver
this Consent Form on behalf of such beneficial owner.
2. EXPIRATION DATE.
The Consent Solicitation expires at 5:00 p.m., New York City time on August
10, 1998, unless the Issuer, in its discretion, extends the period during which
the Consent Solicitation is open, in which case the term "Expiration Date" shall
mean, with respect to the Consent Solicitation as so extended, the latest date
and time to which such Consent Solicitation is extended. In order to extend the
Expiration Date, the Issuer will give notice to all Holders as provided in the
Consent Solicitation Statement. The Issuer may extend the Consent Solicitation
on a daily basis or for a specified period of time.
3. QUESTIONS REGARDING VALIDITY, FORM, LEGALITY, ETC.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of consents and revocations of consents will be resolved
by the Issuer whose determinations will be binding. The Issuer reserves the
absolute right to reject any or all consents and revocations that are not in
proper form or the acceptance of which could, in the opinion of the Issuer's
counsel, be unlawful. The Issuer also reserves the right to waive any
irregularities in connection with deliveries which must be cured within such
time as the Issuer determines. None of the Issuer, the Guarantor, the Trustee,
the Information Agent or any other person shall have any duty to give
notification of any such irregularities or waiver, nor shall any of them incur
any liability for failure to give such notification. Deliveries of Consent forms
or notices of revocation will not be deemed to have been made until such
irregularities have been cured or waived. The Issuer's interpretation of the
terms and conditions of the Consent Solicitation (including this Consent Form
and the accompanying Consent Solicitation Statement and the instructions hereto
and thereto) will be binding on all parties.
4. HOLDERS ENTITLED TO CONSENT.
Only a Holder as defined herein (or its representative or attorney-in-fact)
or another person who has complied with the procedures set forth below may
execute and deliver a Consent Form. Any beneficial owner or registered holder of
the Notes who is not the Holder thereof (e.g., held in the name of DTC or the
beneficial owner's broker, dealer, commercial bank, trust company or other
nominee institution) must arrange with such Holder(s) on such Holder's assignee
or nominee to execute and deliver this Consent Form on behalf of such beneficial
owner. FOR PURPOSES OF THE CONSENT SOLICITATION, THE TERM "HOLDER" SHALL BE
DEEMED TO INCLUDE DTC PARTICIPANTS THROUGH WHICH A BENEFICIAL OWNER'S NOTES MAY
BE HELD OF RECORD AS OF THE RECORD DATE IN DTC. A consent by a Holder is a
continuing consent notwithstanding that ownership of a Note has been transferred
subsequent to the Record Date, unless the Holder timely revokes the prior
consent in accordance with the procedures set forth herein and in the Consent
Solicitation Statement.
4
<PAGE> 5
5. SIGNATURES ON THIS CONSENT FORM.
If this Consent Form is signed by the Holder(s) of the Notes with respect
to which this consent is given, the signature(s) of such Holder(s) must
correspond with the name(s) as contained on the books of the register maintained
by the Trustee or as set forth in DTC's position listing without alteration,
enlargement or any change whatsoever.
If any of the Notes with respect to which this consent is given were held
of record on the Record Date by two or more joint Holders, all such Holders must
sign this Consent Form. If any Notes with respect to which this Consent is given
have different Holders, it will be necessary to complete, sign and submit as
many separate copies of this Consent Form and any necessary accompanying
documents as there are different Holders.
If this Consent Form is signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should indicate such fact
when signing, and, unless waived by the Issuer, evidence satisfactory to the
Issuer of their authority to so act must be submitted with this Consent Form.
6. SIGNATURE GUARANTEES.
All signatures on this Consent Form must be guaranteed by a firm or other
entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, including (as such terms are defined therein): (a) a bank, (b) a
broker, dealer, municipal securities dealer, municipal securities broker,
government securities dealer or government securities broker; (c) a credit
union; (d) a national securities exchange, registered securities association or
clearing agency; or (e) a savings institution that is a participant in a
Securities Transfer Association recognized program (each an "Eligible
Institution"). However, signatures needed not be guaranteed if this Consent is
given by or for the account of an Eligible Institution. If the Holder of the
Notes is a person other than the signer of this Consent Form, see Instruction 5.
7. REVOCATION OF CONSENT.
Any Holder of the Notes as to which a consent has been given may revoke
such consent as to such Notes or any portion of such Notes (in integral
multiples of US$1,000) by delivering a written notice of revocation or a changed
Consent Form bearing a date later than the date of the prior Consent Form with
the Issuer at any time prior to the Requisite Consent Date. Each Holder of Notes
who delivers a consent agrees that it will not revoke its consent after receipt
by the Trustee of the Requisite Consents, and that until such time such Holder
will not revoke its consent except in accordance with the conditions and
procedures for revocation of consents provided herein. THE TRANSFER OF THE NOTES
AFTER THE RECORD DATE WILL NOT HAVE THE EFFECT OF REVOKING ANY CONSENT VALIDLY
GIVEN BEFORE SUCH TRANSFER BY A HOLDER OF SUCH NOTES, AND EACH PROPERLY
COMPLETED AND EXECUTED CONSENT FORM WILL BE COUNTED NOTWITHSTANDING ANY TRANSFER
OF THE NOTES TO WHICH SUCH CONSENT RELATES, UNLESS THE PROCEDURE FOR REVOKING
CONSENTS DESCRIBED BELOW HAS BEEN COMPLIED WITH.
To be effective, a notice of revocation must be in writing, must contain
the name of the Holder, and the aggregate principal amount of the Notes to which
it relates and must be (a) signed in the same manner as the original Consent
Form or (b) accompanied by a duly executed proxy or other authorization (in the
form satisfactory to the Information Agent). Revocation of consents must be sent
to the Information Agent at the address set forth in this Consent Form.
To be effective, the revocation must be executed by the Holder of such
Notes in the same manner as the name of such holder appears on the books of the
register maintained by the Trustee or as set forth in DTC's position listing
without alteration, enlargement or any change whatsoever. If a revocation is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person must indicate such fact when signing and must submit with
the revocation appropriate evidence of authority to execute the revocation. A
REVOCATION OF A CONSENT WILL BE EFFECTIVE ONLY AS TO THE NOTES LISTED ON THE
REVOCATION AND ONLY IF SUCH REVOCATION COMPLIES WITH THE PROVISIONS OF THIS
CONSENT FORM AND THE CONSENT SOLICITATION STATEMENT. Only a Holder of the Notes
is entitled to revoke a consent previously given. A beneficial owner of the
Notes must arrange with the Holder to execute and deliver on its behalf a
revocation of any consent already given with respect to such Notes. A transfer
of Notes after the Record Date must be accompanied by a duly executed proxy from
the relevant Holder if the subsequent transferee is to have revocation rights
with respect to the relevant consent to the Proposed Amendments. A purported
notice of revocation that is not received by the Information Agent in a timely
fashion and accepted by the Information Agent as a valid revocation will not be
effective to revoke a consent previously given.
A REVOCATION OF A CONSENT MAY ONLY BE RESCINDED BY THE DELIVERY OF A
WRITTEN NOTICE OF REVOCATION OR THE EXECUTION AND DELIVERY OF A NEW CONSENT
FORM. A
5
<PAGE> 6
HOLDER WHO HAS DELIVERED A REVOCATION MAY THEREAFTER DELIVER A NEW CONSENT FORM
BY FOLLOWING ONE OF THE DESCRIBED PROCEDURES AT ANY TIME PRIOR TO THE EXPIRATION
DATE.
The Issuer reserves the right to contest the validity of any revocations.
8. WAIVER OF CONDITIONS.
The Issuer reserves the absolute right, subject to applicable law, to
amend, waive or modify the terms and conditions of the Consent Solicitation.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Requests for assistance in completing and delivering Consent Forms or for
additional copies of the Consent Solicitation Statement, this Consent Form or
other related documents should be directed to the Information Agent at the
locations and numbers as set forth below:
The Information Agent:
Via Regular Mail or By Hand or Overnight Delivery
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
Contact Persons: Paul Hebert or Chris Dowd
Facsimile Transmission:
(201) 804-8693
(Originally executed consents must follow)
Confirm by Telephone
(201) 896-1900 or Call Toll Free (800) 346-7885
You may also contact your broker, dealer, commercial bank or trust company
or nominee for assistance concerning the Consent Solicitation.
6
<PAGE> 1
EXHIBIT T3E.3
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
SOLICITATION OF CONSENTS TO AMEND INDENTURE
RELATING TO
11 1/4% GUARANTEED SECURED NOTES DUE 2007
ISSUED BY
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 PRINCIPAL AMOUNT OUTSTANDING)
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
July 13, 1998
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Polytama International Finance B.V. (the "Issuer") and P.T. Polytama
Propindo (the "Company") are soliciting consents (the "Consent Solicitation"),
upon the terms and subject to the conditions set forth in the enclosed Consent
Solicitation Statement dated July 13, 1998 (the "Statement") and the enclosed
form of Consent (the "Consent Form") from holders (the "Holders") of 11 1/4%
Guaranteed Secured Notes due 2007 (CUSIP Number 73180UAA0) (The "Notes") to the
proposed amendments (the "Amendments") of the Indenture relating to the Notes.
We are asking you to contact your clients for whom you hold the Notes
registered in your name or in the name of your nominee or who hold the Notes
registered in their own names.
The Issuer and the Company will not pay any fees or commissions to any
broker or dealer or other person for soliciting consents from Holders of the
Notes pursuant to the Consent Solicitation. You will be reimbursed for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients.
Enclosed is a copy of the following documents:
1. The Statement.
2. The Consent Form for your use and for the information of your
clients.
For purposes of the Consent Solicitation, the Depository Trust Company
("DTC") has authorized DTC Participants ("Participants") set forth in the
Position Listing of DTC as of the Record Date to execute consent forms as if
they were the Holders of the Notes held of record in the name of DTC or the name
of its nominee. Accordingly, for purposes of the Consent Solicitation, the term
"Holder" shall be deemed to include such Participants. Only those holders
appearing on the Participant Position Listing provided by the Depository Trust
Company should submit their consents to the Trustee.
Your prompt action is required. The Issuer and the Company will not be
making any payments in connection with the Consent Solicitation. Consents to the
Amendments may be revoked at any time prior to the execution of the First
Supplemental Indenture giving effect to the Amendments.
<PAGE> 2
Additional copies of the enclosed material may be obtained from the Trustee
or the Information Agent.
Very truly yours,
Polytama International Finance B.V.
P.T. Polytama Propindo
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON
AS AN AGENT OF THE ISSUER, THE COMPANY OR THE TRUSTEE, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE STATEMENT OR THE ACCOMPANYING CONSENT FROM.
2
<PAGE> 1
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
SOLICITATION OF CONSENTS TO AMEND INDENTURE
RELATING TO
11 1/4% GUARANTEED SECURED NOTES DUE 2007
ISSUED BY
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 PRINCIPAL AMOUNT OUTSTANDING)
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
July 14, 1998
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Polytama International Finance B.V. (the "Issuer") and P.T. Polytama
Propindo (the "Company") are soliciting consents (the "Consent Solicitation"),
upon the terms and subject to the conditions set forth in the Consent
Solicitation Statement dated July 13, 1998 (the "Statement") and the enclosed
form of Consent (the "Consent Form") from holders (the "Holders") of 11 1/4%
Guaranteed Secured Notes due 2007 (CUSIP Number 73180UAA0) (the "Notes") to the
proposed amendments of the Indenture relating to the Notes. The Statement and
the Consent Form were sent to you earlier under cover of the letter dated July
13, 1998.
We enclose herewith:
1. a cover letter addressed to the Holders, dated July 14, 1998;
2. the revised Consent Form (on yellow paper); and
3. the Company's Annual Report on Form 20-F for the fiscal year ended
December 31, 1997;
We request that you forward the documents listed above to your clients for
whom you hold the Notes registered in your name or in the name of your nominee
or who hold the Notes registered in their own names.
Additional copies of the enclosed material or the Statement may be obtained
from the Trustee or the Information Agent.
Very truly yours,
Polytama International Finance B.V.
P.T. Polytama Propindo
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON
AS AN AGENT OF THE ISSUER, THE COMPANY OR THE TRUSTEE, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE STATEMENT OR THE ACCOMPANYING CONSENT FROM.
<PAGE> 1
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
SOLICITATION OF CONSENTS TO AMEND INDENTURE
RELATING TO
11 1/4% GUARANTEED SECURED NOTES DUE 2007
ISSUED BY
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 PRINCIPAL AMOUNT OUTSTANDING)
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
July 14, 1998
To the Holders (as defined below):
Polytama International Finance B.V. (the "Issuer") and P.T. Polytama
Propindo (the "Company") are soliciting consents (the "Consent Solicitation"),
upon the terms and subject to the conditions set forth in the Consent
Solicitation Statement dated July 13, 1998 (the "Statement") and the enclosed
form of Consent (the "Consent Form") from holders (the "Holders") of 11 1/4%
Guaranteed Secured Notes due 2007 (CUSIP Number 73180UAA0) (the "Notes") to the
proposed amendments of the Indenture relating to the Notes.
Further to the Statement and the Consent Form, which were previously sent
to you, we enclose herewith:
1. the revised Consent Form (on yellow paper) which has been amended
from the original Consent Form (on blue paper) previously sent to you; and
2. for your ease of reference, the Company's Annual Report on Form
20-F for the fiscal year ended December 31, 1997, which was filed with the
Securities and Exchange Commission on June 30, 1998.
Please replace the original Consent Form (on blue paper) with the enclosed
revised Consent Form (on yellow paper) and refer to the instructions in the
Consent Form and the Statement with respect to completion and return of the
Consent Form.
Additional copies of the enclosed material or the Statement may be obtained
from the Trustee or the Information Agent.
Very truly yours,
Polytama International Finance B.V.
P.T. Polytama Propindo
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON
AS AN AGENT OF THE ISSUER, THE COMPANY OR THE TRUSTEE, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE STATEMENT OR THE ACCOMPANYING CONSENT FROM.
