Trikomsel composition plan OK’d by court; noteholders pledge support

By Caroline Salls

Pittsburgh, Oct. 5 – A steering committee of holders of PT Trikomsel Oke Tbk.-guaranteed fixed-rate notes released a statement through its attorney O’Melveny & Myers LLP that grants committee support for the company’s composition plan, according to a Trikomsel Pte. Ltd. news release.

The committee said it is seeking “fair and appropriate treatment of the unsecured SGD notes for the benefit of all noteholders, relative to the company’s secured lenders and other creditors.”

Trikomsel said the Central Jakarta Commercial Court ratified its composition plan and ended its nearly 270-day long PKPU process in September following approval of the composition by creditors.

The committee said it was provided with some limited information after earlier expressing concerns regarding the treatment of the notes proposed in earlier drafts of the company’s plan, and the committee met with Trikomsel to discuss this information and the proposed treatment of the notes.

Based on the information shared with it, the committee said it understands that the company continues to be a going concern, “albeit critically short of working capital, and currently unable to make payment on its secured and unsecured liabilities, including the SGD notes.”

As a result, the committee said it understands that the company’s debt obligations are unsustainable in their current form.

Under the court-ratified plan, all Singapore dollar notes will be exchanged for 25% of the restructured company’s equity, taking into account all other equity conversions under the plan and additional equity injections required from current shareholders.”

The committee said it “considers this 25% equity stake in the restructured company meaningful and believes it compares well versus the equity to be received by other creditors, including converting secured lenders.”

In order to protect the interests of all converting noteholders in achieving a meaningful future exit from the restructured company, the committee said it proposed that the 25% equity stake allocated to noteholders be held in a Singapore law-governed trust arrangement, the cost and administration of which will be paid fully by the company.

The committee said the company accepted this proposal, as well as a committee proposal that the shares held through the noteholders trust be entitled to appoint a member to the restructured company’s board of directors, so long as the block equals or exceeds 20% of Trikomsel’s voting equity.

The committee said its members agreed to support the plan ratified by the court in recognition of the company’s agreement to allocate a meaningful 25% stake to converting noteholders with the additional protections, “and the limited options available to unsecured creditors and noteholders generally.”

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

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