Indonesia Plantation Firm PTPN Gets OK for Dollar Loan Restructuring

Indonesian state-backed plantation firm PT Perkebunan Nusantara III obtained approval from all creditors of its syndicated dollar loan to lengthen the term, in a positive development for the country’s credit market that’s faced mounting debt concerns during the pandemic.

Lenders of a $390.6 million syndicated loan agreed to extend the facility by five years, with a three-year extension option, said Muhammad Iswahyudi, finance director at Perkebunan Nusantara III, or PTPN Group, in a text message on Friday. Under the new deal, Perkebunan Nusantara will pay interest of 262.7 basis points over Libor, higher than what was previously set.

The all-lender consent on the Perkebunan Nusantara’s dollar loan is likely to revive banks’ confidence in the offshore Indonesian loan market. A request for a standstill last May from the palm oil producer shocked foreign lenders, who have since become increasingly wary of providing offshore loans to Indonesian companies, given recent distress in the nation’s apparel sector.

Highlighting the difficulties in that industry, Indonesia’s biggest listed clothing firm PT Sri Rejeki Isman has paused payments on a dollar loan while PT Pan Brothers is discussing an extension of a matured dollar financing with banks.

PTPN Group had proposed to foreign creditors in April 2020 a long-term financial transformation plan that included revamping the dollar debt, Iswahyudi said. The company signed a restructuring deal earlier this year with local lenders to restructure its rupiah loans.

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