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 the Client into default on its outstanding debts. After bilateral restructuring discussions with its creditors failed, two creditors filed a PKPU petition against the Client in the Commercial Court.
• 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.
• 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 debt exposure to the Group to a distressed debt fund.

Our Approach

• We were appointed immediately after the PKPU filing.
• Assessed the economics of the business model and strategies implemented by the Client, and identified the risks of such strategies to the Client’s future financial performance;
• Developed a major deleveraging structure through a debtor-supervised sale of non-operating assets and the core business;
• Developed a monitoring structure for the implementation of the agreed terms, including the establishment of a Creditor Steering Committee to oversee the use of cash and asset disposals; and
• Developed the commercial section of the Composition Plan, and coordinated closely with legal counsel on the development of the legal section.

Outcome