Political unrest in Indonesia could add to APP's problems

The company hopes that prices will recover in the next quarter.

The news has increased fears that the region's economic problems are set to get worse.

The international petroleum company Exxon Mobil recently closed down oil and gas fields in Indonesia because of security concerns.

With many of its plants in Indonesia, APP is also vulnerable to political and ethnic unrest in the country.

Creditors

APP now hopes to reach an agreement with its creditors, and plans to discuss the "way forward" with them.

APP has always been a heavy borrower, paying high interest rates to compensate lenders for the risk.

Bank lenders are usually the last to be repaid if a company goes belly-up.

Credit Lyonnais has already filed a writ against the company over doubts that the company would repay its debts.

In February, APP had made one late payment to pay back debt and missed another.

It is estimated that the company has between $1.5bn and $2bn of debt to pay back this year.

The 10th largest

Headquartered in Singapore, APP is the 10th largest paper company in the world. It produces 5.7 million tonnes of paper and packaging a year.

The company, which is listed on the New York Stock Exchange, has 17 manufacturing facilities in Indonesia, China and India.

It may be difficult for creditors to seize assets because the company has so many operations in different countries.

American depositary receipts for APP could be delisted by the NYSE because they have traded below $1 for more than 30 days.

Two US ratings agencies - Standard & Poor's and Fitch IBCA - have both downgraded the company's credit worthiness.