On 29 March, Managing Partner of Mishcon Singapore and Head of Asia, Tahirah Ara spoke at a webinar sponsored by Asian Business Law Institute and INSOL International on 'Utilising Singapore (and Other Offshore Jurisdictions) to Restructure Indonesian Companies', alongside panellists Michael S. Carl, from SSEK Legal Consultants in Jakarta and Meiyen Tan from Oon & Bazul, LLP in Singapore.
Key takeaways from the panel were:
- Singapore is a funding hub for Indonesian companies for both bank loans and bonds. When an Indonesian company is looking to restructure its debts, it will want to consider both Singapore and Indonesia.
- Indonesia’s restructuring regime, the PKPU, has been criticized but all bankruptcy systems have some issues, and Indonesia’s PKPU is good in enforcing a strict timeline of 270 days for restructuring a company’s debts.
- A key issue for any Singapore restructuring of an Indonesian company will be that Jakarta courts will likely not recognize the orders from a Singapore court, including for a moratorium on actions against the company.
- Nevertheless, Singapore may be useful for some Indonesian companies to do a limited restructuring of their bonds, as a limited restructuring is not possible in PKPU, which is only available to restructure all of a company’s debts.
Global Restructuring Review - ABLI & INSOL: Is Singapore a good alternative for Indonesian companies? (subscription required)