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

• Following the homologation of the PKPU Composition Plan, the Client was legally required to implement the agreed restructuring terms with its creditors. While the Composition Plan established the principal commercial framework, the detailed legal and financial documentation required for implementation remained to be finalized.
• The implementation process was complex due to differing interpretations among creditor groups and their legal counsel regarding the application of certain restructuring terms. In addition, disputes emerged over the allocation of security among the newly issued instruments replacing the pre-existing debt facilities.
• Failure to finalize the implementation documentation and corporate actions in accordance with the Composition Plan would have exposed the Client to renewed liquidation risk.

Our Approach

• Worked closely with the Client and legal counsel to translate the commercial terms of the Composition Plan into detailed implementation documentation, including note documentation, security agreements, agency agreements, and amendments to the Client’s Articles of Association;
• Provided a financial and commercial perspective to reconcile differing creditor interpretations during negotiations over the implementation terms;
• Developed a rationale for the allocation of security across the restructured debt instruments that was ultimately accepted by all creditor groups;
• Assisted the Client in structuring a tolling arrangement to address immediate operational liquidity needs during the implementation phase; and
• Worked closely with stakeholders to ensure that the implementation documentation accurately reflected the agreed restructuring framework.

Outcome