The Beauty of Indah Kiat – PT Indah Kiat

Indah Kiat have drag tens notes holders to court. This was the reaction, caused of being threatened, confisticating assets of Indah Kiat in Bengkalis, Riau.

Bringing legal action might be the best way. See how the disagreement between Indah Kiat Pulp & Paper with several notes holder of Indah Kiat International Finance Company B.V. (IHIFC), affiliated firm of Indah Kiat. The creditors have threatened to confiscticate the asset, factory in Bengkalis Riau, one of the biggest paper factories in Indonesia. It was actually a great shock, to press charges the notes holders.

The step Indah Kiat took was shockingly. Demand letter to the notes holders of IKIFC, commanded by Mizuho Bank Indonesia was to remind Indah Kiat as guarantee, to have an open conversation about debt restructuring and as collateral agent, Mizuho was appointed to handle the asset of PT Indah Kiat which have been collateral as IKIFC obligation.

Reaction of the IKIFC notes holders was without foundation. Since year 2001, they were worried, because several companies under Asia & Pulp & Paper Company (APP) was declare to failed paying the debt (default). The impact was, payment of notes, be due on 21st of June was unpaid. So was the interest payment of the notes which was to be due on 2002 and 2006.

The indenture, signed on June 29, 1994, state Indah Kiat will guarantee IKIFC obligation of notes holders. As proove of capability, land and factory of Indah Kiat in Bengkalis Riau, has become collateral object. If breach contract happened with treaty from trustee (bank guarantee notes), collateral agent have the rights to confisticate and auction the collateral object.

Representing the notes holder and as agreed by Bank of America National Trust Company as trustee, last November, Mizuho Bank (before known as Fuji International Indonesia) proposed a demand letter through District Court of Bengkalis: Before 9th of October, Mizuho also asked court to confisticate the asset of Indah Kiat in Bengkalis.

Between changes and Disagreement

With limit of time, dated on 13th November, mentioned Indah Kiat have accelerated a counter attack. Not only submitting objection over petition execution attachment but Indah Kiat was also confisticating the 14 parties. Beside Board of National Defense Bengkalis and 13 parties among others who was involved with the notes issued by IKIFC. “We have presume, they are going to execute a resistance. But what they did can harm the process of restructuring.” said Satrya Wijaya Teja, as an attorney in fact for Bank Mizuho.

Confisticating 14 parties was base on the assumption of an agreement signed by Indah Kiat with several parties was nothing but only changes. “All documents are not appropriate to the law in Indonesia,” said Hotman Paris Hutapea, as an attorney in facts for PT Indah Kiat. According to Hotman Paris, Indah Kiat is not the debenture of the notes holder but were the debenture from IKIFC.

According to Hotman, there are no reasons for several companies to confisticate the assets of PT Indah Kiat. “There are no names as mortgage holder.” Indah Kiat was certain of doing double payments to IKIFC and to several foreign companies confessing of having notes. “This all are only changes, “said Hotman. That is why referring to the first document, Indah Kiat have asked court to cancel the agreement.

On the contrary Satrya assumed the step Indah Kiat took was unreasonable. “What does it mean, by BPPN signing the guarantee, during process of restructuring if at the end they are going to deny it?” asked Satrya. Satrya was surprised, because APP was corporative enough towards the claims of the creditors and notes holder. Things was kind of stagnant, more likely it’s because, how to agree on the restructuring process. Instead, now they are frontally opposing,’ said Satrya.

Worried being confisticated by Mizuho, Indah Kiat asked court to confisticate the assets of Indah Kiat in Bengkalis, With purpose transfer of asset during process of court won’t happened. Hotman Paris describe” we have been pointed with a gun which means we have to defend ourselves.

But Satrya is not willing to loose therefore he said” if Indah Kiat is not capable of paying, at least do it in a prestige’s way.