On 19 March, Managing Partner of Mishcon Singapore and Head of Asia, Tahirah Ara spoke at the Asian Legal Business Asia Debt and Debt Restructuring Forum 2021 at the Pan Pacific Hotel, Singapore. Tahirah participated in a panel discussion on 'Navigating Indonesian Debt Restructurings in 2021', alongside panellists Ben Crilly, Managing Director of Borrelli Walsh, Jakarta office and Pierre Dzakpasu from Mayer Brown in Singapore.
Key takeaways from the panel were:
- Lots of private debt is looking for distressed opportunities in Asia but there is a price mismatch between these potential buyers and bank sellers.
- Investment banks are pitching bond offerings to stressed companies to refinance debts, but this seems a risky strategy for a stressed company if the offering is not successful.
- Some Indonesian companies have successfully used Singapore courts to restructure their NY law governed bonds but given the difficulties of enforcing Singapore judgements in Indonesia, a Singapore court restructuring is not a panacea for Indonesian companies that need a comprehensive debt restructuring.
- The Indonesian PKPU process is still the best option for Indonesian companies that need a comprehensive restructuring and creditors should also be more engaged in the PKPU process rather than be passive actors.
- Do not underestimate the power of relationships in Indonesia. The most successful restructurings are where the creditors actively engage with borrowers, forging real relationships, and respect is given both ways.