(July 23): Private lenders to PT Visi Media Asia secured a rare win in Indonesian court after a Jakarta judge ruled to fully admit their US$560 million (RM2.62 billion) claim, allowing them to participate in the debt restructuring of the embattled media company.
The ruling by Judge Kadarisman Al Riskandar of the Central Jakarta Commercial Court on Monday overruled an earlier decision by court administrators who had rejected the claim, according to a statement from a group of creditors. Lenders to the company include funds managed by Tor Investment Management and Varde Partners Inc.
The judge’s action stands in contrast with some recent decisions by Indonesian courts that have gone against international creditors. Those rulings triggered concerns that international investors would struggle to recover money they are owed in Indonesia even as Asia is considered one of the fastest growing markets for the US$1.7 trillion private credit industry.
Judge Al Riskandar’s decision sets a positive precedent for Indonesia’s court-supervised debt restructuring regime known as PKPU, according to Andi Kadir, a senior partner at Jakarta-based law firm Hadiputranto, Hadinoto & Partners.
“This decision will give more confidence in Indonesia’s legal system and sends a positive signal to the international investor community regarding the independence of the legal apparatus and the PKPU regime as a viable restructuring framework in Indonesia,” Kadir said.
Jakarta-based Visi Media, which is controlled by Indonesia’s Bakrie conglomerate, didn’t immediately reply to a request for comment.
The court administrators, in rejecting the lenders’ claims, had cited a lawsuit filed by the company’s subsidiary, Intermedia Capital, against 13 creditors, Bloomberg News reported in May. According to court documents seen by Bloomberg, the lawsuit claimed the private credit funds unlawfully seized and enforced the shares backing their loan.
But Judge Al Riskandar said on Monday that the lawsuit had little merit and he’s convinced that the shares haven’t changed hands, according to Marx Andryan, managing partner of MARX & Co, which represents the lenders.
The debt in question was originally incurred by Visi Media under a US$230 million credit facility in 2013, the lender group said in a statement. It was then refinanced at the request of Visi through senior and junior facilities in 2017, it said.
The facilities have been in default since 2018, and the debtors “haven’t remedied any of their defaults nor made any payment of principal or interest” to the lenders for the last four years, according to the group’s statement.
Other lenders in this case include Goldman Sachs Group Inc, AB CarVal Investors LP, Arkkan Capital and UBS Group AG.
The media company came up with a restructuring proposal last week, under which it would delay final repayment of the principal owed to a group of private credit funds by as much as 30 years. The funds’ earlier exclusion from a verified list of creditors meant they wouldn’t have been able to participate in any discussions on a possible deal or vote against the plan.
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