IWIRC Indonesia

Indonesia's Textile Crisis 🧥 Quick Take: Sritex’s Financial Knot (4 November 2024) - Net sales fell 21% in 1H24 mainly due to a plunge in yarn exports. - Sritex made a gross loss of $18.5m as sales were eroded by COGS. - It swung to a net operating cash outflow of $5.1m on a sharp drop in cash from customers and payments to suppliers. https://lnkd.in/gtAkw_Di 👔 Quick Take: Anatomy of Sritex’s Fall (1 November 2024) - Indonesian media and Sritex’s boss blame the textile company’s bankruptcy on Chinese imports. - A reconstruction of events since 2020 shows that imports are not the sole reason for Sritex’s quagmire. https://lnkd.in/gUhNQXw7 👚 Quick Take: Can Sritex Be Saved? Part 2 (28 October 2024) - Indonesia's Sritex is fighting to stave off bankruptcy while labour unions are calling for a state bailout. - Sritex's boss said he will form a "big strategy" to save the business after meeting the Industry Minister. - Refined options for the textile company based on feedback from financial and legal friends. https://lnkd.in/gXEb4--C   👖 Quick Take: Can Sritex Be Saved? Part 1 (27 October 2024) - Sritex has filed an appeal at Indonesia’s Supreme Court to overturn a lower court’s bankruptcy ruling. - President Prabowo Subianto has tasked four ministries to save Sritex and prevent mass layoffs. - Why none of the potential options for Sritex is particularly feasible. https://lnkd.in/gkyKxTbP   👕 Quick Take: Sritex’s Bankruptcy Caps Fall from Grace (25 October 2024) - Sritex was declared bankrupt by a local court but it may file an appeal. - It’s uncertain if Sritex’s creditors can recover any value from a liquidation. - Beyond Sritex, the larger issue of whether post-PKPU restructurings should be allowed has resurfaced. https://lnkd.in/ggHJB_YZ 🧦 Quick Take: Sritex’s Restructuring Deal Risks Fraying (17 September 2024) - Indonesian textile company Sritex faces a court petition to cancel its PKPU deal and declare it bankrupt. - Why Arpeni Pratama Ocean Line's bankruptcy in 2019 has raised the bar for a post-PKPU restructuring. https://lnkd.in/g6s22QVn   🧤 Quick Take: Pan Brothers Takes Off Its Gloves (26 October 2024) - Pan Brothers is proposing a debt-to-equity swap and a back-loaded loan repayment in its latest restructuring. - The Indonesian textile company entered PKPU around two years after its Singapore scheme of arrangement. - A state-backed loan guarantee scheme to help businesses recover from the pandemic has failed to lift the textile sector. https://lnkd.in/gVp-7fcx   🎽 Quick Take: Indonesia’s Textile Tangle (30 August 2024) - Why the Indonesian government's restrictions on Chinese textile imports are not addressing the crux of the problem. - Pan Brothers is back in restructuring just two years after its debt deal. https://lnkd.in/gwdeu2D6 👗 Quick Take: Indonesian Restructuring Case Studies (25 September 2024) - Bakrie Telecom - Sri Rejeki Isman (Sritex) - Indonesian Coal Miners https://lnkd.in/gD-8qyZS

Sritex News Roundup 1. Sri Rejeki Isman (Sritex) President Director Iwan Kurniawan Lukminto said the Indonesian textile company will reject a state bailout if offered by the government. Sritex has its own business strategy and what it really needs is for the Supreme Court to overturn a lower court's bankruptcy ruling, according to Lukminto. For the full story: https://lnkd.in/gyVt_m_Y 2. A parliamentary official urged the government to rescue Sritex's workers in a transparent and accountable way. Herman Khaeron, a member of a parliamentary commission overseeing state-owned enterprises (Komisi VI), said that asking an SOE to take over Sritex will put its own finances at risk. The textile company's huge debt pile will potentially add to the SOE's financial burden, he noted. For the full story: https://lnkd.in/gfKTDAx4 3. Several independent researchers pointed to Sritex's internal management as a key reason for its bankruptcy. Gloria Angelita Tomasowa, Head of the Center for Entrepreneurship, Tourism, Information, and Strategy (CENTRIS) at Sahid University, said that Sritex mismanaged its debt for refinancing since 2020. Ahmad Heri Firdaus of the Institute for Development of Economics and Finance (INDEF) also urged stakeholders to look at the long-standing problems in the textile sector, instead of pinning all the blame on a Trade Ministry regulation that was issued less than six months ago. For the full story: https://lnkd.in/g_6KteEH

Danantara News Roundup 1. Indonesia's State-Owned Enterprises (SOE) Minister Erick Thohir said he will support President Prabowo Subianto's new state-owned investment holding company Danantara. While Danantara will run at least seven of the most profitable SOEs, Thohir said his ministry will focus on restructuring those that are financially troubled. Out of 47 SOEs, Thohir said only seven are still "sick": - Krakatau Steel - Bio Farma - Wijaya Karya - Waskita Karya - Asuransi Jiwasraya - Perum Perumnas - Perum Percetakan Negara Republik Indonesia (PNRI) For the full stories: https://lnkd.in/gvfeguRg https://lnkd.in/gx-yKeSp 2. A parliamentary official said the separation of SOE assets is an important point in the formation of Danantara. Dividends from SOEs are supposed to contribute to the state budget, according to Sartono Hutomo, a member of a parliamentary commission overseeing SOEs (Komisi VI). These SOE dividends should flow into non-tax state revenue, instead of becoming a source of investment funds for Danantara, he said. For the full story: https://lnkd.in/gBqc7dnn 3. Danantara is likely to appoint Minister of Investment and Downstreaming Rosan Roeslani and business tycoon Pandu Sjahrir as its key officials, according to local media. Roeslani and Sjahrir are set to become Danantara's Chairman and Chief Operating Officer (COO), respectively, while former Financial Services Authority Chairman Muliaman Hadad will be Chief Executive Officer (CEO), Katadata reported. For the full stories: https://lnkd.in/g_uacqKF https://lnkd.in/gjTvuGkc https://lnkd.in/gdRbMmqe

The Indonesian sovereign wealth fund is making a concerted push into hybrid capital solutions, such as private credit, by inking partnerships with at least three investment managers in recent months. https://buff.ly/3UJhByi #sovereignwealthfund #privatecredit #investments #assetowner

Indonesian authorities hunt for former CEO of defaulted online lender Investree: Metro TV Indonesian authorities are searching for Adrian Gunadi, the former CEO of defaulted peer-to-peer (P2P) lender Investree who has run overseas, Metro TV reported. The Financial Services Authority (OJK) already revoked Investree's permit and the company has not returned funds to lenders. The OJK - along with law enforcement officers - are trying to get Gunadi to return to Indonesia, according to Metro TV. For the full story: https://lnkd.in/gYBqgNZK

New boss for #Indonesia's state-backed #energy company PT Pertamina (Persero), who is a protege of the country's latest president Prabowo. One source told Energy Intelligence "It’s a political appointment and gives Simon a mandate to carry out Prabowo’s priorities. On paper, he might not have the right qualifications, or industry experience, so his role is more likely keeping a close eye on the industry and Pertamina." According to another political analyst, energy self-sufficiency is high on #Prabowo’s agenda, therefore, direct political appointment from the president means the agenda can be driven more strongly, as opposed to negotiating with various interest groups. Read the full story: https://lnkd.in/gxMGYuXF PT Pertamina Hulu Indonesia PT Pertamina Hulu Energi #NOC #Upstream #OIL #GAS #LNG #energytransition #CCS #Asia https://lnkd.in/gxMGYuXF

Visi Media Asia outlines restructuring deal with creditors: Statement Visi Media Asia (VIVA) said its restructuring agreement with creditors included cash payments in stages and a debt-to-equity swap. In response to a query from the Indonesia Stock Exchange, the company gave an outline of its restructuring deal: 1. Cash payment in stages This scheme applies to: a) Unsecured debt as categorized in the restructuring agreement. This will be paid within different time periods, the fastest being 19 months since the effective date and the slowest being 256 months. b) Secured debt that must be settled within 6 months. 2. Debt-to-equity swap This scheme will only be implemented if there is still debt that has not been settled upon the maturity date specified in the first scheme (cash payment in stages). The outstanding debt will then be converted to equity. For the full statement: https://lnkd.in/gXbKW8Wr

Adaro Energy Indonesia, the world’s sixth-largest #coal mining company, plans to spin off its thermal coal business, Adaro Andalan Indonesia (AAI), through a public offering. According to IEEFA's Mutya Yustika and Ghee Peh, Adaro’s spin-off of AAI may have started a trend in #Indonesia: Depending on how Adaro defines AAI’s assets, it has an opportunity to set a precedent for responsible coal exit strategies. The sale of AAI raises questions about whether Adaro’s strategy is a true step toward emissions reduction or simply a balance sheet cleaning exercise that may not lead to actual reductions in Indonesia’s carbon footprint. "If Adaro falls short of its share placement target, shareholders could be left with both the clean and dirty assets. Decisive, progressive plans are essential to manage these liabilities effectively and allow a greener, leaner Adaro to achieve its sustainable #investment goals." #sustainability #mining #energytransition

Trump Tariffs Cloud Asian Ports' Outlook Proposals by Trump to impose a universal tariff of 10-20% on all imports and a tariff of at least 60% on Chinese imports may pressure Asian port volumes, though India and Asean ports may benefit from the ongoing shift of supply chains from China. Dollar bond issuers have rating headroom to weather rising headwinds, even as capex could lead leverage to weaken. Read my latest research on the Bloomberg terminal: https://lnkd.in/gzB3NNGX Bloomberg Intelligence #credit #tariffs

Pan Brothers outlines 6 November presentation to creditors: Statement The Company has presented its business plan and restructuring terms to the lenders. The business plan delineates sales targets for 2024, 2025, and the subsequent years, which are based on insights gathered from discussions with our current customers. In light of anticipated working capital constraints, the Company expects a further decline in sales in 2025. However, the period from 2026 to 2030 is projected to serve as a recovery phase, during which the Company aims to enhance sales and stabilize its working capital conditions. Based on these projections, it is estimated that the Company’s sustainable debt level will be lower than its current debt level. As for the restructuring terms, the Company has proposed: - The syndicated debt will be structured into 2 (two) distinct tranches, with repayment periods set at 11 years and 15 years. - The inactive LC facility from Maybank will be settled through a sale of the associated collateral. - Permata will have the option to reactivate the LC facility or convert it into a term loan. - Bonds, along with non-active bilateral lenders, will be converted into mandatory convertible bonds (MCBs). - The terms and conditions applicable to active LC facility providers and supply vendors will remain unchanged and will continue to be governed by the prevailing agreements. The Company would like to emphasize that the cash flow projections and restructuring proposals presented are predicated on the assumption that the PKPU process will be finalized as scheduled on November 22, 2024. Achieving this target is essential for the continuity of the Company's business operations. Delays in the PKPU process could introduce uncertainty that may diminish the confidence of potential buyers, which in turn could adversely affect purchasing interest and order volumes, particularly for the Fall/Winter 2025 season. Consequently, it is imperative for all parties involved in the PKPU process to collaborate effectively to ensure adherence to the established timelines. It is vital to emphasize that, amidst the ongoing restructuring and PKPU efforts, the Company remains dedicated to sustaining normal business operations. One of the Company's top priorities is to maintain our workforce and the assurance of employee welfare. For the full statement: https://lnkd.in/gvn-YGQt