Indonesia’s Trikomsel can’t pay debt obligations, eyes notes committee

By Caroline Salls

Pittsburgh, Oct. 26 – PT Trikomsel Oke Tbk. updated the holders of the senior fixed-rate notes issued by Trikomsel Pte. Ltd. on Trikomsel Oke’s liquidity position and challenges, including evaluating possible restructuring options, and invited the noteholders to establish an informal steering committee that would discuss potential options and proposals with the company going forward, according to a notice released Monday.

Trikomsel Oke said it does not expect to be able to make interest payments due in November and December, although it will continue to service interest on essential banking facilities in Indonesia, which are required for the company to continue operations.

As its first step, Trikomsel said it will propose a formal standstill to bank creditors and bondholders.

In addition, the company said it will hold talks with bank creditors over the next few months to discuss Trikomsel’s business plan and restructuring solutions. The proposed steering committee would represent noteholders in these talks.

The company said it is looking to present restructuring proposals to all relevant creditors within the next two to three weeks, with a goal of entering restructuring term sheets by Jan. 31 and executing definitive documentation by Feb. 29.

According to the notice, Trikomsel has faced a continuous decline in performance. The company said a general slowdown in the Indonesian economy resulted in a curbing of spending, reducing sales.

Trikomsel said these factors have reduced its working capital position and left it unable to meet its debt obligations.

The company said its current debt increased in the six months ended June 30 to IDR3.6 trillion from IDR3.3 trillion as a result of increases in short-term bank loans and trade payables to third parties. Non-current debt remained at IDR3.4 trillion as of June 30.

Trikomsel is a mobile phone operator based in Jakarta, Indonesia.

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