Dharmala Sakti asks court for time to negotiate debts

JAKARTA (JP): Publicly listed PT Dharmala Sakti Sejahtera asked the Jakarta Commercial Court on Monday to hold off issuing a verdict in a bankruptcy suit filed against the holding company to allow it to negotiate its debt restructuring with creditors.

"Considering the clear signs of economic recovery in Indonesia, Dharmala Sakti Sejahtera sees a good chance to improve its operations and be able to settle its debts with the creditors," said Anwar from Indriany, Anwar and Jimmy law firm, representing Dharmala Sakti.

Joint venture PT Hanil Bakrie Finance Corporation filed a bankruptcy suit against Dharmala Sakti in mid-February for the latter's failure to repay US$2.4 million in matured promissory notes.

Dharmala Sakti also has outstanding debts totaling $114.5 million and Rp 457 billion with other local and foreign creditors.

Among the biggest creditors are the Indonesian Bank Restructuring Agency, Hong Kong-based Peregrine Fixed Income, currently in liquidation, the Singapore branch of Canadian Imperial Bank of Commerce, joint venture PT AB Sinar Mas Finance and the Jakarta office of Standard Chartered Bank.

Anwar said his client was progressing in serious debt restructuring negotiations with the above creditors and some others, covering about 50 percent of the total debt value.

"So, it is fair that Dharmala Sakti petitioned the court for a suspension of payment, or a PKPU", Anwar said.

According to the 1998 Bankruptcy Law, a company facing a bankruptcy suit can temporarily halt the action by filing a PKPU request with the court.

If the request is approved, the company is given a maximum of 270 days to negotiate a debt restructuring deal with all of its creditors.

However, the grace period can be ended at any time by a majority vote of the creditors if the borrower fails to show it has the ability and good faith to settle its debts.

The majority vote is decided by at least three fourths of the number of the creditors who attend the court-supervised creditors' meeting. The three-fourths vote must represent at least 50 percent of the total value of the debt.

If the PKPU period ends without a debt restructuring deal in place, the borrower is automatically declared bankrupt. By being declared bankrupt through the PKPU process, the borrower loses its right to appeal to the Supreme Court under the law.

Dharmala Sakti is a holding company of Dharmala Group, owned by the Gondokusumo family.

There are five companies affiliated to Dharmala Group that have been declared bankrupt: PT Dharmala Agrifood, PT Putra Surya Multidana, PT Deemte Sakti Indo, PT Putra Sejahtera Persada and foreign affiliate Detron Ltd. of Singapore.

Another, PT Aster Dharma, was also declared bankrupt, but the decision was overruled by the Supreme Court through its civil review decision late last year. (udi)