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Restructuring

“Own your situation. Early.”
— Mark Chadwick

PT WSBP Restructuring

Debtor Financial Advisor for USD 537mn (IDR6T+) Restructuring

  • Type of process : Court-supervised (PKPU) - Indonesia
  • Client side : Debtor / Company-side advisor to PT Waskita Karya Beton Precast Tbk (“PT WSBP”)
  • Core tool : Composition Plan combining cashflow-based repayment, Mandatory Convertible Bond issuance, and debt-to-equity conversion
  • Complexity driver : Multi-creditor negotiation, liquidity constraints, negative equity, COVID-19 impact, and intercreditor alignment
  • Sector exposure : Precast concrete, infrastructure, construction materials, and government-linked infrastructure projects

Background

  • In 2022, PT WSBP underwent a court-supervised PKPU process in the Indonesian Commercial Court.
  • The Company had been highly impacted by COVID-19, which caused revenue to decline significantly while fixed overhead costs across its plants continued to burden cashflow.
  • PT WSBP’s equity had turned negative up to 2021, and the Company was unable to service its creditor obligations.
  • Despite the financial distress, there was confidence that WSBP’s business could recover, supported by ongoing and potential projects linked to government priority infrastructure programs.
  • PT WSBP required a restructuring scheme that could provide sufficient cashflow relief while preserving business continuity and creditor confidence.
  • E&L was appointed to structure the optimal terms to be proposed to creditors and agreed through the PKPU process.

E&L Value Add

  • E&L reviewed PT WSBP’s financial position, creditor profile, cashflow capacity, and operational recovery assumptions.
  • E&L classified creditors by security status, credit aging, business continuity importance, and response to the PKPU process.
  • E&L built cashflow projections and simulated recovery scenarios based on creditor classification, repayment priority, and available cash for debt service.
  • E&L analyzed and negotiated haircuts, repayment terms, and creditor-specific requirements to align the proposal with WSBP’s repayment capacity.
  • E&L explored repayment alternatives including refinancing, Mandatory Convertible Bond, and debt-to-equity conversion.
  • E&L supported the cash waterfall mechanism, creditor engagement, and proposal refinement to balance court requirements, creditor acceptance, and WSBP’s post-PKPU business continuity.

Outcome

  • E&L proposed a restructuring scheme in 5 tranches, as follows:

o Tranche A – repayment based on Cash Available for Debt Services, as simulated in the Cash Waterfall projection within 10 – 17 years

o Tranche B – repayment through the issuance of Mandatory Convertible Bond

o Tranche C – repayment through conversion of debt to equity

  • E&L structured a scheme for the MCB and conversion to shares
  • E&L obtained vote from the majority of creditors as required by the court
  • The scheme was ratified by the Indonesian Commercial Court as a new agreement with the creditors.
  • The agreed scheme provided PT WSBP with cashflow relief and a longer runway to support operational recovery.
  • The restructuring supported balance sheet improvement while preserving the Company’s ability to continue pursuing infrastructure-linked projects.