Pasaraya - Debt Restructuring

Debt Refinancing & Construction Loan

Type of process : Debt fundraising, debt restructuring
Client side : PT Pasaraya Tosersajaya
Core tool : Financial Projection, Pro Forma Assessment, Cash Waterfall, Debt Structuring, and Debt Capacity Analysis
Complexity driver : Multi-entity legacy debt, overlapping lender exposure, encumbered assets, limited debt-servicing capacity, and restricted access to domestic financing.
Sector exposure : Property, construction, retail space leasing, strata office, and high-rise residential

Background

The Company had limited cash flow & minimal capacity to service legacy debt incurred in the late 1990s.
The debt was owed to three lenders under a syndicated facility and separate bilateral facilities extended to different subsidiaries & sister companies within the same corporate group.
The debt was secured against two properties: one pledged under the syndicated facility, while the other pledged under one of the bilateral facilities.
Although periodic repayments had been made, a significant balance remained outstanding.
The market value of the properties had risen substantially above the remaining debt. However, significant revitalization was required before they could be repositioned as income-generating assets.
The unresolved legacy debt restricted access to new local financing, while both properties were already encumbered and no additional assets were available as collateral.
E&L was engaged to formulate a group-wide debt restructuring strategy and secure new financing to refinance the legacy debt and fund the property revitalization.

E&L mapped the debt obligations, collateral positions, and lender exposures across the relevant subsidiaries and sister companies to establish a workable restructuring perimeter.
E&L developed a group-wide repayment strategy that prioritized key lender settlements, enabled the release of one property, and substantially refinanced the legacy debt.
E&L designed an offshore SPV and ring-fenced financing structure to isolate the new facility and the revitalized property’s cash flows from legacy obligations elsewhere in the group.
E&L built an integrated financial model covering refinancing requirements, revitalization costs, projected property cash flows, repayment capacity, and debt-service waterfalls.
E&L conducted fundraising with offshore lenders and negotiated the commercial and financing terms of the new facility.
E&L negotiated with existing lenders on repayment priorities, seniority, security arrangements, collateral release, and the treatment of the remaining legacy debt.

E&L secured a term sheet from an offshore lender under a financing structure accepted by the relevant existing lenders.
E&L achieved alignment among the new and existing lenders on repayment priority, security arrangements, collateral release, and restructuring of the residual legacy obligations.
E&L enabled the release of one property while substantially refinancing the outstanding legacy debt.
E&L structured sufficient funding to cover both the debt refinancing and the required property revitalization.
E&L established a ring-fenced repayment structure under which the revitalized property’s future cash flows would support repayment of the new facility.
E&L demonstrated that the new facility could be repaid within approximately five years and the remaining legacy debt within approximately nine years.
E&L created a pathway for the Company to regain access to local financing within approximately one year, allowing the offshore facility to potentially be refinanced at a lower cost.