UPDATE 3: First Hearing of Lippo Karawaci Associate Mahkota Sentosa Utama PKPU Proceeding Sees Creditor Claims Incl. Meikarta Buyers Amounting to IDR 16B

UPDATE 3: 2:36 a.m. ET 11/18/2020:

Indonesian property developer PT Mahkota Sentosa Utama (MSU) - an associate company of PT Lippo Karawaci Tbk - which is behind the development of the Meikarta project told the Central Jakarta Court during the first hearing of its PKPU proceedings, that Reorg attended yesterday, Nov. 17, that it is preparing to receive a creditor composition plan and maintained its stance that it is continuing to work with court administrators and creditors.

As reported, the PKPU process was initiated by PT Graha Megah Tritunggal (GMT) and PT Kendal Tujuh Properti on Nov. 9 against MSU. GMT provides area management and security services to MSU based on a working contract agreement dated June 1, 2018, as reported earlier.

The court administrators told the court that currently there had been claims submitted from 2,263 creditors - some of which include buyers of the Meikarta project - with the current total claims amounting to IDR 15.96 billion ($1.1 million).

The submitted claims against MSU have not been verified and the total amount remains unconfirmed as there could be more creditor submissions in the coming days, the court administrator further detailed.

According to a source close, MSU’s total debt obligation to GMT is included in the aforementioned IDR 15.96 billion of claims and the claim is in the range of “billions of rupiah” and has been outstanding for around a year.

Other creditors who attended the proceeding told the court during the hearing that the one day lead time from reviewing the composition plan to voting on the plan is too short, and this could be an arrangement that favours MSU.

MSU’s PKPU proceeding schedule is as follows:
 
-- Sarah Yuniarni

---

UPDATE 2: Lippo Karawaci Associate Mahkota Sentosa Utama Tried to Seek Amicable Settlement With PT Graha Megah Before PKPU; Graha Megah Provided Area Management, Security Services

UPDATE 2: 1:36 a.m. ET 11/13/2020: PT Lippo Cikarang Tbk (LPCK) announced yesterday (Nov. 12) to the Indonesia Stock Exchange that its associate company PT Mahkota Sentosa Utama (MSU), the company behind the development of the Meikarta project, tried to seek an amicable settlement with a creditor before the Central Jakarta Court’s decision to place it under a PKPU process.

MSU said in the announcement that the creditor insisted on filing the PKPU proceeding against MSU despite its earlier efforts, the announcement shows.

According to the announcement, one of the applicants of the PKPU process against MSU - PT Graha Megah Tritunggal - provides area management and security services to MSU based on a working contract agreement dated June 1, 2018.

The announcement did not provide further details of the other applicant of the PKPU process against MSU, PT Kendal Tujuh Properti.

MSU management also said in the announcement that it has appointed a legal representative to handle its PKPU submission - including a composition proposal that will be presented to creditors for their approval - and will remain proactive in following the legal process.

According to another announcement in an Indonesian newspaper, Republika, on Nov. 12, the first creditors’ meeting for MSU’s PKPU proceedings is scheduled for Nov. 16 based on the following schedule:
 
Claim submissions are to be done via the PKPU’s administrators’ office, the newspaper announcement shows.

---

UPDATE 1: Lippo Karawaci’s Associate Mahkota Sentosa Utama States it Does Not Recognise Validity of PKPU, Respects Ongoing Legal Process

UPDATE 1: 12:31 a.m. ET 11/11/2020: Indonesian property developer, PT Mahkota Sentosa Utama (MSU), the company behind the development of the Meikarta project announced today (Nov. 11) that it does not recognise the validity of the Central Jakarta Court’s decision to place it under a PKPU process but it will respect the ongoing legal process.

MSU is an associate company of PT Lippo Karawaci Tbk and its subsidiary, PT Lippo Cikarang Tbk, according to Lippo Karawaci’s 9M’20 financial disclosures.

A court directive further shows that MSU is urged to repay its outstanding and due obligations within 40 days from the court’s earlier decision to place the company under a PKPU process.

MSU said in the announcement that it is committed to carry on and complete the Meikarta project and it believes the ongoing case will not affect the project’s construction progress as well as its commitment to buyers.

See Reorg’s earlier coverage of the Meikarta project’s progress HERE.

---

Original Story 5:06 a.m. UTC on Nov. 10, 2020

Central Jakarta Court Places Lippo Subsidiary Mahkota Sentosa Utama Under PKPU; Next Hearing Scheduled on Dec. 18

Relevant Document:
Court Document - Nov 9 (Bahasa)

The Central Jakarta court in a Nov. 9 announcement posted to the court's website, said that PT Mahkota Sentosa Utama (MSU), the company behind the development of PT Lippo Cikarang Tbk’s (LPCK) Meikarta project, has now been placed under PKPU.

Mahkota is urged to repay its debt obligations within 40 days from the court’s announcement, the court’s directive states.

The announcement further states that Mahkota’s next hearing has been scheduled on Dec. 18 at the commercial court in Central Jakarta.

The PKPU against Mahkota was filed by creditors from PT Kendal Tujuh Properti and PT Graha Megah Tritunggal, according to the announcement. The latter had filed the PKPU proceedings against Mahkota with the Central Jakarta court on Oct. 6, the directive states.