Sritex escaped bankruptcy after the majority of its creditors approved the textile giant’s restructuring proposal. The decision was made at the suspension of debt payment obligations (PKPU) session on 21 January at the Semarang Commercial Court. 

The company submitted the reconciliation proposal to the Singapore stock exchange on 3 January. The proposal stated that bondholders will receive additional tranche of secured notes within the additional five years. The bondholders will receive two tranches of secured notes.

The proposal also stated that Sritex will exchange bonds due 2024 and 2025 for three tranches of secured notes. The three new bonds are Tranche A Secured Notes worth US$105 million, Tranche B Secured Notes worth US$135 million and Tranche C Convertible Notes worth US$135 million.

The peace plan proposal was made after Sritex missed payment on its loan. The company on 18 May 2021 was suspended from all stock exchange markets for failing to fulfil its obligation to pay coupons and principal of medium term notes (MTN). 

In June 2021, during its debt payment obligation suspension period, the company’s loan reached almost Rp 20 trillion. Sritex also proposed a 120-day extension on the debt suspension process. 

In October 2021, the company proposed another extension and the Semarang Commercial Court granted it a 77-day extension until 6 December 2021. Finally, after the second extension is due, the company asked for another extension for 50 days until 25 January 2022 due to the complexities of the restructuring process. 

Before the latest extension is due, the company decided to propose a reconciliation scheme, which was agreed upon by its creditors. “According to the voting results during the meeting on 21 January 2022, the majority of creditors agreed with the reconciliation plan proposed by Sritex," said a member of Sritex PKPU Management Team Martin Patrick Nagel on Monday (24 January).  

As reported by CNBC, the company has proposed restructuring of its debts worth Rp19.96 trillion. 

“The decision of the Commercial Court trial at the Semarang District Court on Tuesday (25 January) states that the reconciliation plan proposed by the company and its subsidiaries at the creditors' meeting has been homologated," said Sritex Corporate Secreta