Debt Restructuring and Financial Advisory

Corporate Debt Restructuring
The Process

CREDITORS’ DEMANDS

Repayment of Principal

Keeping interest current

Improving security arrangement

No preferential treatment of creditors

Insistence on more information

Demand for the appointment of Auditor/Special Accountant

THE DILEMMA

Western-style business practices, which most offshore banks adopt, depend on the use of legal systems as impartial arbitrators of disputes.  The Indonesian legal system however, is not so clear-cut.

Hence

Any restructuring is going to be either by way of:

Negotiated Settlements or Government-driven solutions

Some borrowers rely too much on their flawed legal systems to avoid their debt obligations.

However, companies must remember that:

Lenders will not go away as Indonesia’s debt is too huge

Non resolution is not cost-effective for companies

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