Indonesian government to appeal Bakrie Telecom debt restructuring, minister says

6 Jul 2015

Indonesia’s Communication and Information Technology Minister Rudiantara says that the ministry has appealed to the country’s Supreme Court as it seeks to overturn Bakrie Telecom’s (BTel’s) debt restructuring plan. The telco, which is part of the heavily indebted Bakrie Group, confirmed and agreed the restructuring proposal last year that was subsequently approved by the court in Jakarta. Although 94.5% of its creditors moved to back the proposal, some bondholders said they were excluded from the process and, as such, would receive only a proportion of their money as a result of the decision. Bakrie Telecom owes licence and frequency rights fees to the government, which did not get to vote on the restructuring proposal, Rudiantara told Reuters. ‘During their restructuring process, we were not informed, we were not involved,’ the minister said. ‘We request that their debt to the government is not part of the restructuring.’ It is understood that BTel owes around IDR1.2 trillion (USD90 million) to the Indonesian government, and Hal Hirsch, a lawyer representing investors who had sued the operator over its USD380 million bond in New York, notes that should the Supreme Court overturn the decision, the restructuring will be ‘deemed to have failed’, placing BTel into bankruptcy.

Indonesia, Bakrie Telecom (BTel)