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Indonesia’s Sritex to Seek $275 Million Loan Facility in Meeting

Indonesia’s Sritex to Seek $275 Million Loan Facility in Meeting

Indonesian clothing firm PT Sri Rejeki Isman plans to propose the reactivation of working capital facilities through a revolving loan in the amount of $275 million in a creditors’ meeting.

The secured working capital revolver would help the Jakarta-listed company, known as Sritex, in the procurement of raw materials and reduce the needs to make cash advance payments to its raw material suppliers, according to a proposed term sheet dated Nov. 5 that was accessed through a link in a filing to Singapore exchange on Saturday.

Sritex would offer the total commitments under the revolver to eligible participating holders on a pro rata basis based on the outstanding principal amount of their bilateral loans and/or syndicated loans, the term sheet said. Interest for the revolver would accrue at varying rates, depending on the original currency of the exposure of the participating holders, either in Indonesian rupiah, U.S. dollar or euro. The facility would be effective for a duration of five years.

The secured working capital revolver would be part of Sritex group’s proposed debt settlement, worth an equivalent of $1.4 billion, the document shows. In addition to the revolver, Sritex would also seek a $350 million nine-year secured term loan. A creditors’ meeting to discuss the term sheet is set for Nov. 12, according to the filing.

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Sritex, which has made clothes for global brands including Hennes & Mauritz AB, Uniqlo and Zara, was hit by a decline in orders during the pandemic. It was put under a debt suspension process in May by the Semarang Commercial Court after business partner CV Prima Karya filed a petition claiming that Sritex owes it 5.5 billion rupiah ($383,783). It had paused payments on a dollar loan and was in the middle of preparing a restructuring proposal for lenders when Prima Karya filed the petition.

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