Project Petrochemical

Project Overview

Our Client is a major Indonesian petrochemical producer with a complex shareholder structure involving state-owned enterprises, strategic investors, and private stakeholders.

Challenges

• Operational disruptions and external shocks severely impacted the Client’s ability to service its debt obligations, leading creditors to file a PKPU petition with the Indonesian Commercial Court.
• The Client’s creditor base was highly diverse, comprising state-owned enterprises, distressed debt funds, hedge funds, oil traders, and contractors.
• At the time of restructuring, the Client was under the operational control of Pertamina alongside PT Perusahaan Pengelola Aset (PPA) as the majority shareholder. The company faced an immediate liquidity crisis and a multi-layered debt structure that required a comprehensive restructuring solution to avoid liquidation.
• The restructuring involved approximately USD 1.9 billion of liabilities, with competing creditor interests and a complex interrelated capital structure requiring careful alignment across stakeholders.

Our Approach

• AJCapital acted as the financial advisor representing the Client.
• Prepared a financial forecast to simulate free cash flow, assessed critical and urgent cash needs of the Client, assessed working capital and capex of the Client. We incorporated these into the proposed composition plan where the Client was able to (1) raise short term cash via bridging loans and/or tolling operation, (2) raise priority financing for working capital and capex with priority security rights.
• Defused the high tensions that had built up with and among the creditors by initiating, organizing, and moderating multiparty discussions.
• Represented the Client in negotiations with key creditors in securing their votes in PKPU court, and agree a commercially viable structuring scheme.
• Worked side by side with the Client’s appointed legal counsel to manage the Client through the PKPU process successfully.

Outcome