Article/Intelligence
UPDATE 17: Curators Admit $1.83B-Equivalent Debt Claims Under Sritex Bankruptcy Proceedings, Reject $265M Claims
Wed Feb 05, 2025 02:44 AM ET: The court-appointed curators of the bankruptcy proceedings of Indonesian textile company PT Sri Rejeki Isman Tbk and its subsidiaries – PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya – admitted debt claims amounting to IDR 29.88 trillion ($1.83 billion) from 465 creditors, while rejecting claims of IDR 4.33 trillion, according to the final list of creditors seen by Octus.
The admitted debt claims consisted of IDR 619.6 billion from 349 preferred creditors, IDR 919.8 billion from 21 secured creditors and IDR 28.3 trillion from 95 unsecured creditors, according to the creditors list.
Out of the IDR 7.33 trillion submitted under the bankruptcy proceedings, the curators admitted IDR 6.18 trillion in unsecured debt claims from Citicorp Investment Bank (Singapore) Ltd., which is the trustee of Sritex’s restructured $105 million secured notes due 2027, $135 million secured notes due 2031 and $135 million convertible notes due 2027, the creditors list showed.
The curators rejected debt claims in the amount of IDR 4.33 trillion from 1,189 creditors that include around IDR 1.2 trillion debt claims submitted by companies affiliated with the Sritex group, according to the creditors list.
As reported, Sritex and the subsidiaries entered bankruptcy after the Semarang Commercial Court granted a petition filed by its creditor, PT Indo Bharat Rayon, to annul the 2022 court-sanctioned debt restructuring agreement. The Supreme Court also dismissed a cassation appeal by Sritex and the subsidiaries to overturn the lower court’s ruling.
UPDATE 16: Indonesia Supreme Court Says Lower Court Ruling That Tipped Sritex, Subsidiaries Into Bankruptcy Is Correct, Not in Conflict With Law
Tue Feb 04, 2025 01:27 AM ET: Indonesia textile company PT Sri Rejeki Isman Tbk, or Sritex, announced (Bahasa Indonesia) to the IDX today, Feb. 4, that it received on Jan. 31 the Supreme Court’s ruling dated Dec. 18, 2024, that dismissed a cassation appeal filed by the company seeking to overturn a lower court’s ruling that tipped it into bankruptcy. Sritex said that it is preparing to file a review against the Supreme Court’s dismissal.
In its ruling (Bahasa Indonesia), the Supreme Court said the Semarang Commercial Court’s judgement annulling the 2022 court-sanctioned debt restructuring agreement, or PKPU, is correct and not in conflict with the law. The ruling tipped Sritex and its three subsidiaries – PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya – into bankruptcy,
The Supreme Court was in agreement with the Semarang Court that Sritex and its subsidiaries had failed to fulfill their obligations under the debt restructuring agreement after stopping monthly payments since July 2023 to the petitioner, PT Indo Bharat Rayon, on the grounds that the petitioner already received recovery from a third party through an insurance subrogation scheme.
Furthermore, Sritex had failed to provide proof of the alleged recovery and guarantee that the monthly payment to Indo Bharat will resume, according to the ruling.
The Supreme Court’s ruling was deliberated by a panel of three judges – chief judge Hon. Prof. Dr. H. Hamdi, and members Hon. Dr. Nani Indrawati and Dr. Lucas Prakoso.
As reported, Indo Bharat, an Indonesian subsidiary of Indian conglomerate Aditya Birla Group, has total claims of IDR 128 billion ($7.8 million) registered under the 2022 court-sanctioned restructuring agreement, in which Sritex and its subsidiaries must make monthly payment of at least $17,000 for four years starting September 2022. Indo Bharat had received payment of around IDR 26.7 billion up until June 2023.
UPDATE 15: Semarang Court Again Postpones Creditors’ Vote on Sritex Going Concern Status
Thu Jan 30, 2025 09:01 PM ET: The Semarang Commercial Court in a creditor’s meeting on Thursday, Jan. 30, agian postponed a vote on whether to maintain PT Sri Rejeki Isman Tbk as a going concern, in relation to the ongoing bankruptcy proceedings of the Indonesian textile company and its subsidiaries, PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya, Nurma Candra Yani, one of the court-appointed curators, told Octus.
Hon. Haruno Patriadi, the supervisory judge of the proceedings, gave the court-appointed curators and the debtor 21 days to discuss the going concern scheme before another creditor’s vote to be held, Yani said.
UPDATE 14: Semarang Commercial Court Judge Postpones Unsecured Creditors’ Vote on Sritex Going Concern Status, As Bank Lenders Demand Viable Business Plan; Indo Bharat’s Lawyer Suggests Hiring Third-Party to Manage Sritex Operations
Thu Jan 23, 2025 03:43 AM ET: Lawyers for bank lenders to Indonesian textile company PT Sri Rejeki Isman Tbk, or Sritex – including CIMB Bank Singapore, Bank QNB Indonesia and Bank Danamon Indonesia – insisted at a creditor’s meeting which Octus attended on Jan. 21 that the company must table a viable business plan so that their clients can make an informed decision before casting votes on declaring it a going concern. Supervisory Judge Hon Haruno Patriardi ultimately postponed the vote until Jan. 30, after heated debate at the meeting.
The creditors meeting, held at the Semarang Commercial Court, dragged late into the day as lawyers contested Judge Patriardi’s interpretation of thresholds for creditor votes under Indonesia’s bankruptcy laws.
Meanwhile, over the course of the day-long hearing, which commenced at 10 a.m. and ended at 7 p.m., unions representing Sritex’s workers – the company is variously reported to employ up to 50,000 people – presented arguments in court in opposition to one another, on one side arguing to maintain the company with a going concern status, on the other side arguing to reject it and tip the company into liquidation.
Sritex and its subsidiaries PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya, are in bankruptcy proceedings after unsecured creditor PT Indo Bharat Rayon successfully filed a petition to annul Sritex’s 2022 court-sanctioned debt restructuring, or PKPU.
Kyora Law Firm, representing 13 lenders under the unsecured creditors class, including Bank QNB Indonesia, CIMB Bank Singapore and Taipei Fubon, and Duma & Co, representing Bank Danamon, were among those opposed to the judge’s plan to hold an immediate vote on the going concern status, because their clients had not provided them with voting instructions ahead of the meeting.
The two law firms and A&Co, representing Indo Bharat Rayon, then argued that Sritex management must present a viable business plan before any vote, as it would allow their clients to see precisely how declaring the company a going concern would improve its financials.
A&Co further suggested that a third party be hired to manage Sritex’s operations, since it argued there is a strong doubt that existing Sritex management can turn the business around after making a net loss of $66 million in the nine-month period ended Sep. 30, 2024.
Clause 180
The meeting carried on into the early evening because of the debate between lawyers for unsecured creditors and the judge over the interpretation of clause 180 under Indonesia’s 2004 Bankruptcy Law, which specifically regulates the going concern status of a company under bankruptcy proceedings.
Clause 180 states that a request for going concern by either the curators or unsecured creditors must be accepted if voted for by more than 50% of the unsecured creditors that have been accepted and admitted in the interim creditor’s list.
The attending lawyers’ interpretation of clause 180 is that if more than 50% of unsecured creditors approve it through a vote, then the going concern status has to be approved, and they stated their preference to see the business plan first before any vote. However, the supervisory judge’s interpretation was that the threshold on the going concern status must be established before discussion of a debtor’s business plan can proceed.
There were also differences over interpretation of the threshold, with the judge initially insisting that the percentage was based on headcount, before acceding to the lawyers’ interpretation that it must be based on value.
When asked by the lawyers whether creditors will need to vote again to sanction the business plan, the supervisory judge said it will be up to the unsecured creditors to decide.
The curators said in the meeting that they have verified claims from 83 unsecured creditors, but did not provide the value of those verified claims, or the status of claims from secured creditors. The final list of verified creditors would be released on Wednesday, Jan. 22, the curators said.
The judge scheduled the next creditor’s meeting on Jan. 30 to vote on the going concern status. Sritex management will then have a further 14 days after the meeting to present its business plan, assuming creditors vote in favor of granting the company going concern status.
As reported, no sooner was the company tipped into bankruptcy than its management had demanded that curators declare the company a going concern so that its operations could continue. The high profile nature of the case and the potential for making tens of thousands of workers unemployed has also drawn comments and scrutiny from various levels of the Indonesian government into the situation.
However, the curators refused to change stance, taking the position that the Sritex management had been uncooperative during proceedings, and pushing for the going concern proposal to be voted on by the creditors.
Bondholders Claim
As reported, the Dec. 13 interim list of creditors showed that creditors have filed claims totalling IDR 32.62 trillion ($2.03 billion), comprising IDR 24.74 trillion under the unsecured creditor class, IDR 7.2 trillion under the secured creditor class, and IDR 691 billion under the preferred creditor class.
Citicorp Investment Bank (Singapore) Ltd., the trustee for Sritex’s restructured $105 million secured notes due 2027, $135 million secured notes due 2031, and $135 million convertible notes due 2027, filed IDR 4.435 trillion unsecured claims and IDR 2.895 trillion secured claims.
At least two bondholders filed separate claims after the trustee issued a notice guiding bondholders to pursue their own legal action in the proceedings, according to two sources.
Citicorp Investment Bank Singapore did not respond to a request for comment.
–Tito Siahaan
UPDATE 13: Curators Will Not Declare ‘Going Concern’ in Sritex Bankruptcy Proceedings
Wed Jan 15, 2025 11:27 PM ET: The court-appointed bankruptcy curators of Indonesian textile company PT Sri Rejeki Isman, or Sritex, and its subsidiaries, will not declare them as a going concern because management has not been cooperative during the process, Nurma Candra Yani, one of the curators, told Octus.
Yani said declaring Sritex as a “going concern” – as pushed by the national government – is intended to increase the value of the business by allowing operations to resume, thus improving the prospects of recovery for creditors. But, given management’s lack of cooperation, the curators don’t expect operations to resume.
Bisnis Indonesia reported on Wednesday, Jan. 15, that a meeting on Tuesday, Jan. 14, for creditors to vote on a proposition to declare the group a a going concern was postponed by supervisory judge Haruno Patriadi because he required further evidence that the subsidiary borrowers’ new legal representatives appearing at the meeting were properly appointed. Sritex director Supartodi’s appearance at the meeting was deemed sufficient only as a representative of the parent itself, the article added.
The creditors vote is an attempt to circumvent the curators’ reluctance to declare the group a going concern, the article said.
The meeting is postponed to next Tuesday, Jan. 21, according to the report.
Bankruptcy in Indonesia is used for liquidation, and curators as liquidators..
Sritex’s legal representatives, Jonggi Siallagan and Patra M Zen, dismissed claims that the company is not cooperative, saying Sritex had prepared an office inside its compound for the curators, though the curators had only visited Sritex’s facilities once during the proceeding, according to the Bisnis Indonesia article.
Local news outlet Detik.com reported that Budi Utoyo, the secretary general of the Nusantara Labour Union Confederate, said union members at Sritex prefer to be laid off so they can get severance pay, withdraw social security and search for a new job.
UPDATE 12: Indo Minister Warns Gov Can Force Sritex Bankruptcy Curators to Declare ‘Going Concern’ Status, Seeks To Prevent Layoffs – Media
Wed Jan 08, 2025 03:42 AM ET: The Indonesian government is in the position to force the court-appointed bankruptcy curators of PT Sri Rejeki Isman Tbk, or Sritex, to immediately declare its a “going concern” and to avoid layoffs, said Deputy Minister for Manpower Immanuel Ebenezer after a visit to Sritex’s facilities today, Jan. 8, according to a report by Detik.
The “going concern” status is needed to assure that Sritex can continue to operate normally, thus avoiding layoffs, which is the government’s main goal, the official said, as reported by the news outlet. This was Ebenezer’s fourth visit to the facilities, during which he said there would be “good news” for workers, but would not elaborate.
Bankruptcy in Indonesia is a liquidation process.
Ebenezer visited Sritex facilities today to persuade the workers not to come to Indonesia’s capital, Jakarta, for large-scale demonstration on Jan. 14 and Jan. 15, according to a separate report by Kompas.com.
UPDATE 11: Sritex Expects Application to Review Supreme Court Cassation Dismissal Upholding Bankruptcy Done by 1Q25
Thu Jan 02, 2025 04:51 AM ET: Indonesian textile company PT Sri Rejeki Isman Tbk, or Sritex, disclosed (Bahasa Indonesia) to the Indonesia Stock Exchange today, Jan. 2, that it expects its review application against the Supreme Court’s Dec. 18 ruling to be done by the first quarter of 2025. The Supreme Court’s ruling dismissed the company’s cassation appeal to overturn a lower court’s ruling that annulled its court-sanctioned debt restructuring agreement and kickstarted bankruptcy proceedings of the company.
The review application is still being processed and is currently 25% complete, according to the announcement.
UPDATE 10: Sritex to File Review Against Supreme Court’s Ruling Dismissing Cassation Appeal to Overturn PKPU Annulment
Mon Dec 23, 2024 12:19 AM ET: Indonesian textile company PT Sri Rejeki Isman Tbk, or Sritex, announced (Bahasa Indonesia) on Dec. 20 to the Indonesia Stock Exchange, or IDX, that it will file a review against the Indonesian Supreme Court’s Dec. 18 ruling that dismissed a cassation appeal to overturn the annulment of the company’s court-sanctioned debt restructuring, or PKPU, agreement.
Sritex had not received a copy of the Supreme Court’s ruling, according to the disclosure.
The ruling by Indonesia’s top court on Dec. 18 means that the ongoing bankruptcy proceedings of Sritex and subsidiaries PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya will continue. The bankruptcy proceedings had been initiated after the Semarang Commercial Court’s ruling on Oct 23 annulling the initial PKPU agreement for Sritex the three subsidiaries.
UPDATE 9: Indonesia Supreme Court Dismisses Sritex Appeal to Overturn PKPU Annulment, Enables Ongoing Bankruptcy Liquidation Process
Thu Dec 19, 2024 04:20 AM ET: The Indonesian Supreme Court has dismissed a cassation appeal filed by Indonesian textile company PT Sri Rejeki Isman Tbk, or Sritex, to overturn the annulment of its court-sanctioned debt restructuring, or PKPU, agreement, said three sources familiar with the matter, citing the Supreme Court’s portal.
The ruling by Indonesia’s top court on Wednesday, Dec. 18, means that the ongoing bankruptcy proceedings of Sritex and subsidiaries PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya will continue, the sources said. The bankruptcy proceedings had been initiated after the Semarang Commercial Court’s ruling on Oct 23 annulling the initial PKPU agreement for Sritex the three subsidiaries.
In Indonesia, bankruptcy proceedings are used to wind up a debtor while a PKPU is for a court-overseen restructuring.
The Supreme Court ruling portal, which is visible just to registered lawyers, had for a while yesterday, Dec. 18, showed that the appeal was approved in a rulling made on Dec 16, but there was no attached ruling, according to one of the first sources familiar and two other sources familiar. By late afternoon yesterday, the site was changed to state that the matter was still being debated, and then the ruling rejecting the appeal was finally posted today, they said.
The cassation appeal was registered to the Supreme Court on Nov. 15, 2024 under case number 1345K/PDT.SUS-PAILIT/2024. Sritex was represented by Aji Wijaya & Co for the appeal.
Sritex trade creditor PT Indo Bharat Rayon, an Indonesian unit of Indian conglomerate Aditya Birla Group, was the petitioner of the PKPU annulment case, arguing that Sritex had failed to comply with the 2022 court-sanctioned PKPU agreement since June 2023. The petition was filed on September 2, 2024 by Bharat, which has IDR 101 billion ($6.3 million) outstanding restructured claims against the debtors, saying they had ceased making payments from June 2023 in the amount of at least $17,000 per month.
Sritex did not respond to Octus’s request for comment.
UPDATE 8: Sritex Creditors File ~$2B-Equiv. Total Debt Claims Under Bankruptcy Proceedings; Bondholders Trustee Files $276M Unsecured Claims, $180M Secured Claims
Tue Dec 17, 2024 03:00 AM ET: Creditors of Indonesian textile company PT Sri Rejeki Isman Tbk., or Sritex, have filed debt claims totaling IDR 32.632 trillion ($2.03 billion) to the court-appointed curators for the bankruptcy proceedings of the company and its subsidiaries, PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya, according to a Dec. 13 interim list of creditors seen by Octus.
A total of 233 creditors filed claims totaling IDR 24.74 trillion under the unsecured creditors class, with the largest claims coming from Citicorp Investment Bank (Singapore) Ltd. totaling IDR 4.435 trillion, according to the document. Citicorp Investment Bank is the trustee for Sritex’s restructured $105 million secured notes due 2027, $135 million secured notes due 2031, and $135 million convertible notes due 2027.
Twenty-two creditors filed IDR 7.2 trillion claims under the secured creditors class, and Citicorp Investment Bank filed claims of IDR 2.895 trillion to the curators, the document shows.
The remaining IDR 691 billion of the total claims were filed under the preferred creditors class, which includes claims filed by the tax and custom offices, and more than 1,800 individual workers of the company, the document shows.
Sritex and its subsidiaries entered bankruptcy following the Semarang Court’s Oct. 21 ruling granting a petition to annul the textile company’s restructuring agreement sanctioned by the court in 2022. The petition was filed by trade creditor PT Indo Bharat Rayon, an Indonesian subsidiary of Indian conglomerate Aditya Birla Group, as reported.
The company, through its lawyers Aji Wijaya & Co, filed a cassation appeal in October to the Indonesia Supreme Court to overturn the Semarang Court’s ruling, as reported.
–Tito Siahaan
UPDATE 7: Sritex’s Mediation With Curators for Company’s ‘Going Concern’ Status Cancelled – Media
Mon Dec 09, 2024 04:50 AM ET: A planned mediation meeting between Indonesian textile company PT Sri Rejeki Isman Tbk, or Sritex, and the court-appointed curators related to the company’s “going concern” status did not take place because the curators cancelled, local media outlet Detikcom reported (Bahasa Indonesia) on Dec. 5, citing Sritex President Director Iwan Kurniawan Lukminto.
The meeting had been brokered by the Ministry of Manpower, with Deputy Minister for Manpower Immanuel Ebeneezer also supposed to attend the meeting, the report adds.
UPDATE 6: BNI, CIMB Niaga File Separate Motions to Form AHG For Sritex Bankruptcy Proceeding, Semarang Court Tells Curators to Finalize ‘Going Concern’ Status Application in 3 Days
Wed Nov 13, 2024 04:54 AM ET: PT Bank Negara Indonesia, or BNI, and PT Bank CIMB Niaga, filed two separate motions to form a creditors ad-hoc group, or AHG, for the ongoing bankruptcy proceedings of Indonesian textile company PT Sri Rejeki Isman Tbk, or Sritex, and its subsidiaries, PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya. The motions were filed by legal representatives of both lenders to the Semarang Commercial Court at a hearing which Octus attended today, Nov. 13.
BNI is represented by Wibhisana & Partners, while CIMB Niaga is represented by Legisperitus Lawyers. Counsel from both firms told Octus that they are comfortable with whichever party the court selects to lead formation of the AHG.
Sritex and its subsidiaries effectively entered bankruptcy following the Semarang Court’s Oct. 21 ruling granting a petition to annul the textile company’s restructuring agreement sanctioned by the court in 2022. The petition was filed by trade creditor PT Indo Bharat Rayon, an Indonesian subsidiary of Indian conglomerate Aditya Birla Group, as reported.
News of Sritex entering bankruptcy garnered nationwide attention, and the country’s new President Prabowo Subianto instructed his ministers to come up with a rescue plan for the heavily-indebted company, CNN Indonesia (Bahasa Indonesia) reported on Oct. 25, citing Industry Minister Agus Gumiwang Kartasasmita. The government’s main concern over the PKPU annulment is the fate of close to 50,000 workers that Sritex employs, according to local media reports (Bahasa Indonesia) on the same date.
However, some recent statements from government officials have taken a different tone, with Minister of Manpower Yassierli reported (Bahasa Indonesia) on Oct. 30 by CNBC Indonesia as stating during a hearing with lawmakers that the bankruptcy is due to Sritex’s complacency in mitigating risks.
Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto was reported in local media (Bahasa Indonesia) on Nov. 5 as stating that the government will only help Sritex in terms of streamlining exports and imports, but will not intervene in its debt restructuring which is the responsibility of the owner, according to local media reports.
Going Concern
The fate of Sritex’s workers is also a key concern for the Semarang Court, according to the supervisory judge Hon. Haruno Patriadi, who today instructed the court-appointed curators to finalize administrative details related to filiing a ‘going concern’ status application for Sritex in three days, which will allow the company to resume normal operations.
In the status update for the bankruptcy proceeding, one of the curators, Fajar Romy Gumilar, told the court that the curators had filed requests to the National Land Office to place restrictions on Sritex’s assets in the form of land in Semarang, Boyolali and Sukoharjo, as well sending requests to banks to place restrictions on Sritex’s bank accounts.
As of Nov. 12, the curators had received claims submission in the amount of IDR 604.9 billion ($38.3 million) from nine creditors, with around IDR 597.6 billion claims being submitted by two different tax offices which will fall under the category of preferred creditors.
Gumilar told Octus that the curators had come up with preliminary estimates on the value of assets of Sritex and its subsidiaries, which are based on the company’s earning statements and the 2022 composition plan. The curators have yet to decide on whether to include assets of Sritex’s sponsors in the proceeding, according to Gumilar.
After meeting with several government officials today, Nov. 13, Sritex’s President Commissioner Iwan S. Lukminto was quoted by local media (Bahasa Indonesia) as saying that the company only has raw materials to last three more weeks, and for that reason has been forced to furlough around 2,500 workers. Sritex’s raw materials are depleting as the curators have blocked any movement of goods from Sritex factories, Lukminto told local media.
Sritex’s legal representatives, Aji Wijaya & Co, told the court the cassation document to appeal the annulment had been received by the Supreme Court on Nov. 12 but no guidance has been provided on when Indonesia’s highest court will deliver its ruling.
According to laws governing the operations of Indonesia’s Supreme Court, a cassation appeal must be filed to the lower court where the proceeding is heard, which then sends the document to the Supreme Court. Upon receiving the cassation document, the Supreme Court must make a ruling within 250 days.
–Tito Siahaan
UPDATE 5: Indonesian Govt Considers Bailout Funds for Sritex, Will Not Take Over Operations – Media
Tue Oct 29, 2024 06:00 AM ET: The Indonesian government is considering rescue options which include dispersing bailout funds to textile company PT Sri Rejeki Isman, or Sritex, to save it from bankruptcy, Bisnis Indonesia (Bahasa Indonesia) reported on Oct. 28, citing Ministry of Industry official Reni Yanita.
The official said there is a possibility of providing bailout funds and wider financial incentives to Sritex and the broader Indonesian textile industry, but dismissed the possibility of taking over operations of the company, while confirming the ministry would work with the Ministry of Manpower, Ministry of Finance and Ministry of State-Owned Enterprises, according to the report
The Ministry of Industry’s Agus Gumiwan Kartasasmita met with Sritex’s President Commissioner, Iwan S Lukminto, on Oct. 28, the report adds.
The meeting followed a Semarang Court’s ruling to annul the Sritex’s 2022 court-sanctioned restructuring agreement, thus automatically entering the company into a bankruptcy proceeding.
As reported, Sritex has filed a cassation appeal to Indonesia’s Supreme Court to overturn the lower court’s ruling that annulled the 2022 restructuring agreement and appointed Aji Wijaya & Co as its legal representatives.
Separately, the Indonesia Stock Exchange announced on Oct. 28 that the trading of Sritex shares had been suspended starting on the same day until further announcement. The suspension is due to uncertainties surrounding the company’s business due to the court ruling.
UPDATE 4: Indonesian President Prabowo Instructs Ministers to Review Sritex Rescue Options – Media
Mon Oct 28, 2024 01:28 AM ET: Indonesian President Prabowo Subianto has instructed the Industry Minister, the Manpower Minister, the Finance Minister and the State Owned Enterprises Minister, to look into options to rescue textile company PT Sri Rejeki Isman, Sritex, CNN Indonesia (Bahasa Indonesia) reported on Oct. 25, citing Industry Minister Agus Gumiwang Kartasasmita.
The instructions came after the Semarang Commercial Court on Oct. 22 issued a ruling to annul Sritex’s 2022 PKPU agreement, automatically tipping the textile company into a bankruptcy proceeding, as reported.
The Industry Minister said the government will immediately take steps to make sure Sritex can keep operating, and its workers can continue to have jobs, according to the report.
UPDATE 3: Sritex Confirms Aji Wijaya & Co Appointment, Creditors Meeting Scheduled for Nov. 13
Mon Oct 28, 2024 01:11 AM ET: Indonesian textile company PT Sri Rejeki Isman Tbk said in an Oct. 25 response (Bahasa Indonesia) to queries from the Indonesia Stock Exchange, or IDX, that it had appointed law firm Aji Wijaya & Co. to represent it in its cassation appeal to the Supreme Court, confirming Reorg’s earlier reporting.
Sritex is seeking through the cassation appeal to overturn a lower court decision to annul the company’s 2022 court-sanctioned debt restructuring, or PKPU, agreement, effectively entering it into bankruptcy proceedings.
Sritex stressed in its announcement that its business operations are continually normally.
As reported, Sritex and its subsidiaries PT Sinar Patja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya entered into a bankruptcy proceeding following the Semarang Court’s annulment ruling on Oct. 21. The Semarang Court also appointed Denny Ardiansyah, Nur Hidayat, Fajar Romy Gumilar, and Nurma Candra Yani Sadikin as curators.
The court-appointed curators have scheduled creditors meetings on Nov. 13 and set a Nov. 25 deadline for claims submissions, according to an invitation seen by Reorg. The verification meeting will be held on Dec. 16, according to the invitation.
UPDATE 2: Sritex Hires Aji Wijaya & Co to Appeal PKPU Annulment to Indonesia’s Top Court; Government Tells Co. to Hold Off Worker Layoffs Until Supreme Court Ruling
Fri Oct 25, 2024 04:12 AM ET: Indonesia textile company PT Sri Rejeki Isman Tbk, or Sritex, has appointed Aji Wijaya & Co. as its lawyer for a cassation proceeding at the Supreme Court of Indonesia to appeal the Semarang Commercial Court’s Oct. 21 ruling that annulled the company’s 2022 court-sanctioned debt restructuring plan, or PKPU, according to two sources familiar with the matter. The application, or memory of cassation, has been filed to the Supreme Court by Aji Wijaya this week, according to the sources.
The annulment of PKPU means Sritex technically entered bankruptcy proceedings, which will liquidate the company, according to Indonesia’s Debt Restructuring and Bankruptcy Law. The company has eight days following the ruling to file a cassation appeal to the Supreme Court.
Several local media outlets reported (Bahasa Indonesia) today, Oct. 25, citing an official from the Indonesian Ministry of Manpower, that the government had told Sritex to hold off any plans – following the annulment ruling – to lay off workers until the Supreme Court makes its ruling. The Indonesian Government’s main concern over the PKPU annulment is the fate of the close to 50,000 workers that Sritex employs, according to the official.
Aji Wijaya & Co. was Sritex’s lawyer during the 2021 PKPU proceedings. In addition, Aji Wijaya represented debtors in several PKPU proceedings, including that of Duniatex Group, and more recently textile company PT Pan Brothers Tbk, and Bakrie Group’s PT Visi Media Asia Tbk.
Sritex was represented by MAJA Consulting during the PKPU annulment proceeding.
As reported, the petition to annul Sritex PKPU was filed by its trade creditor, PT Indo Bharat Rayon, which alleged that the textile company had failed to fulfill its restructuring agreement after stopped making payment for the restructured debt in the minimum amount of $17,000 per month since June 2023. In its defense, Sritex said it stopped making payment as the outstanding debt is disputed due to an alleged recovery made by the petitioner through an insurance subrogation scheme.
The Semarang Court ruled in favor of Indo Bharat as Sritex failed to provide proof during the proceeding that a recovery through insurance had taken place, as reported.
Sritex and Aji Wijaya & Co. did not respond to requests for comment.
UPDATE 1: Semarang Court Annuls Sritex’s 2022 Restructuring Plan After Debtor Fails to Prove Petitioner Had Received Recoveries Through Insurance Scheme
Wed Oct 23, 2024 03:16 AM ET: The Semarang Commercial Court decided to annul the 2022 court-sanctioned restructuring plan, or PKPU, of PT Sri Rejeki Isman and its three subsidiaries, after the Indonesian textile company’s failed to provide proof that the petitioner – Indonesian fiber product maker PT Indo Bharat Rayon – had received recoveries through insurance payments, according to a court document seen by Reorg.
Under Indonesia’s Bankruptcy and Restructuring Law, the annulment automatically tips Sritex into a bankruptcy proceeding. Sritex will file a cassation appeal against the court’s decision, and an up to eight-day window is available for such an appeal, as reported.
The court also approved the appointment of Denny Ardiansyah, Nur Hidayat, Fajar Romy Gumilar, and Nurma Candra Yani Sadikin as curators.
Indo Bharat Rayon had petitioned the court on Sept. 2 for an annulment of the 2022 court-approved composition plan of Sritex and the subsidiaries – PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya – on the basis of around IDR 101 billion ($6.6 million) in unpaid claims, as reported.
Presiding Judge Hon. Muhammad Anshar Majid dismissed arguments made by Sritex and the subsidiaries to the effect that they stopped making payments on the restructured debts to Indo Bharat from July 2023 to avoid making double payments, due to alleged recoveries made by the creditor through an insurance subrogation scheme, according to the court document seen by Reorg.
The same document notes that during the proceeding Sritex and the subsidiaries did not provide evidence that such recovery through a third-party had been made, and therefore there is a legal basis for annulment of the homologation plan.
–Tito Siahaan
Original Story 10:22 p.m. UTC on Oct. 21, 2024
BREAKING: Semarang Court Annuls Sritex PKPU, Co to File Appeal
The Semarang Commercial Court approved on Oct. 21 a petition seeking an annulment to the 2022 court-sanctioned restructuring plan, or PKPU, of Indonesia textile company PT Sri Rejeki Isman Tbk and its subsidiaries in a hearing, according to a source close to and a source familiar with the matter. Sritex will file a cassation appeal against the court’s decision, the sources said.
The petition, filed on Sept. 2 by Sritex’s trade creditor, PT Indo Bharat Rayon, sought an annulment of Sritex’s 2022 composition plan as well as the appointment of Denny Ardiansyah, Nur Hidayat, Fajar Romy Gumilar, and Nurma Candra Yani Sadikin as curators, as reported.
Under Indonesia’s Bankruptcy and Restructuring Law, a PKPU annulment will automatically tip the company into a bankruptcy proceeding, and an up to eight-day period is given for a cassation appeal.