In recent years, Indonesian companies have shown both a greater willingness to use foreign restructuring processes, as well as a greater need to do so given the increasingly sophisticated financing structures and investor bases seen for Indonesian businesses. Some of the notable Chapter 15 protection cases include those involving the Duniatex Group in 2020, PT Bakrie Telecom Tbk in 2018, PT Bumi Resources Tbk in 2017, and Berau Capital Resources Pte Ltd (a Singapore SPV of PT Berau Coal Energy Tbk) in 2015.

The Indonesian Supreme Court has reinstated the right of secured creditors to file a bankruptcy and suspension of payment (Penundaan Kewajiban Pembayaran Utang or PKPU) process.

On May 1, 2020, in connection with the bankruptcy sale of Dean Foods Company (“Dean Foods”), the Department of Justice Antitrust Division required divestiture of certain Dean Foods assets by Dairy Farmers of America Inc. (“DFA”). DFA and Prairie Farms Dairy Inc. (“Prairie Farms”) were acquiring fluid milk processing plants from Dean Foods.

The Indonesian Supreme Court has provided guidance on the availability of the key restructuring process in Indonesia – the examination process of a suspension of payment or restructuring (Penundaan Kewajiban Pembayaran Utang or PKPU). The guidance comes amidst a challenging economic climate and limits the remedies available to secured creditors by preventing secured creditors from initiating a PKPU.

PKPU as a Restructuring Channel