PT Sri Rejeki Isman Tbk (Sritex) has sent a letter to the informal steering committee (ISC) representing the lenders to its $350 million syndicated loan facilities, expressing an objection to their choice of Borrelli Walsh as a financial advisor, according to a copy of part of the letter seen by Reorg.
Separately, the ISC, which originally comprised HSBC (agent), SBI Singapore, Bank of China Indonesia, Permata, DBS Bank and Cathay United Bank, according to three sources, said to have seen two departures with Bank of China exiting, according to two of the three sources, and Permata today deciding it would also exit, according to one of the sources.
CIMB Bank Singapore is tipped as a potential replacement to the steering committee, said two of the sources.
The steering committee represents 29 banks and branches which are lenders to the $200 million term loan and $150 million revolving credit facility both due January 2022.
The letter to the ISC states that as per discussion with management, while the company generally has no objection to the lenders appointing their own financial advisor, the decision to appoint PT Borrelli Walsh caused a bit of concern due to “its reputation among Indonesian businesses and possible issues of conflict of interest, including with the ongoing PKPU case against the company and its subsidiaries”.
The letter dated April 29 states that it would be appreciated if Borrelli Walsh can provide written confirmation to the company that there will be no issues of conflict.
It adds that company “is fully committed to have meaningful discussions with the Lenders to reach amicable resolution with respect to the consensual restructuring that are beneficial for all parties” and “In order to do so, involvement of advisors who are known to be able to work for that objectives [sic] are desirable”.
In addition to discussing widely expected formal engagements of Linklaters and Borrelli Walsh as respective legal and financial advisors, lenders to Sritex’s $350 million term loans are also reviewing the potential appointment of Swandy Halim & Partners as a legal advisor in the event that Sritex is placed into an in-court-supervised restructuring in Indonesia (PKPU), said two sources close to the matter.
As reported, previously syndicated lenders had discussed formal appointments of legal and financial advisors Linklaters and Borrelli Walsh on April 27.
Swandy Halim has been providing counsel to the lender group already, and also represented Bank QNB Indonesia and HSBC Indonesia as bilateral lenders in the recent PKPU petition hearing related to Sritex and its
three subsidiaries, PT Sinar Pantja Djaja, PT Bitratex Industries and PT Primayudha Mandirijaya.
Permata and Swandy Halim declined to comment. Bank of China did not immediately respond to request for comment.
--Sarah Yuniarni, Stephen Aldred