Project Northstar

Project Overview

Our Client is an integrated poultry group based in West Kalimantan.

Challenges

• A series of external competition driven shocks combined with an ill-fated expansion into Java pushed our client, a West Kalimantan integrated poultry Group, into default on its outstanding debts. After bilateral discussions with its creditors on restructuring its debts failed, two of its creditors filed a PKPU petition in the commercial court against the Client.
• Prolonged operational issues and competitive pressure on margins stripped working capital from the Group, limiting operations. The need for additional working capital became a critical issue in restructuring negotiations.
• Stakeholder-creditors consisted of parties with differing interests, which complicated the negotiation process. This was further complicated by the sale by a major bank of its debts in the Group to a distress fund.

Our Approach

• Assess the economics of the business model and implemented strategies of the Client, and identify the risks of such strategies to the Client’s financials going forward.
• Develop major deleveraging structure through debtor-supervised sale of non-operating assets and the core business.
• Set monitoring structure for the implementation of the agreed terms, including the establishment of Creditor Sterring Committee which oversees the use of cash of the Client and asset disposals progress.
• Develop the commercial section of the Composition Plan, and coordinate closely with the legal counsel on the development of the legal section.

Outcome