Adhi Karya – Indonesian PKPU

Creditor & Shareholder Financial Advisor for USD 223mn Restructuring

Type of process : Court-supervised restructuring under Indonesian PKPU
Client side : Financial advisor to PT Adhi Karya (“ADHI”)
Core tool : Scenario analysis, creditor mapping, cash waterfall, NPV / recovery NPV assessment, and restructuring term review
Complexity driver : Dual position as creditor and shareholder, repayment hierarchy, impact on ADHI’s book, and need to balance APP’s restructuring feasibility with ADHI’s financial position
Sector exposure : Construction, property development, infrastructure-linked real estate, and SOE group exposure

Background

In 2023, PT Adhi Persada Properti (“APP”), a subsidiary of PT Adhi Karya (“ADHI”), underwent a restructuring process under Indonesian PKPU.
APP is part of the ADHI group, with exposure to property development and infrastructure-linked real estate projects.
ADHI was both a shareholder and creditor of APP, while also having exposure to other APP creditors within the ADHI group.
As shareholder, ADHI was positioned lower in the repayment hierarchy of APP’s obligations, creating potential financial impact from APP’s restructuring terms.
As creditor, ADHI also needed to assess how APP’s proposed repayment structure would affect recovery, cashflow, and ADHI’s book.
The restructuring required careful assessment of APP’s proposed terms, creditor treatment, and repayment waterfall.
E&L was engaged to review APP’s proposed restructuring terms and support ADHI in identifying the most favorable scenario for its financial position.

E&L communicated with APP’s consultants to understand both parties’ positions, restructuring assumptions, and proposed creditor treatment.
E&L reviewed ADHI’s loan exposure and classified creditor positions based on nature, outstanding amount, impact on APP’s business continuity, and repayment priority.
E&L developed creditor mapping across ADHI-related entities, bank creditors, and other creditors, including assessment of friendly / hostile creditor tendencies
E&L analyzed APP’s proposed restructuring terms and modelled the impact of different scenarios on ADHI’s book.
E&L assessed key restructuring mechanics, including cash waterfall, bank creditor payment terms, cash buffer mechanism, and cash sweep allocation to secured and unsecured creditors.
E&L explored alternative actions to improve APP’s cashflow position, including bankruptcy, asset sale, additional working capital injection, and improvement of cash-generating assets.

E&L recommended five restructuring scenario options based on APP’s initial structure and proposed adjustments to improve ADHI’s position.
E&L showed the impact of each scenario on creditor recovery, using NPV and recovery NPV analysis.
E&L assessed the financial impact of APP’s restructuring terms on ADHI as both creditor and shareholder.
E&L identified adjustments to the cash waterfall, creditor payment terms, cash buffer, and cash sweep mechanism.
E&L helped ADHI compare the trade-offs between recovery value, cashflow feasibility, and impact on ADHI’s financial position.
E&L supported ADHI in assessing whether additional actions, including asset sale and working capital support, could improve APP’s restructuring outcome.
E&L provided ADHI with a clear decision framework to assess the most favorable restructuring scenario for its book, stakeholder position, and negotiation strategy.