26 October 2020 - Article
Withers is pleased to announce that it has advised its client PT Bumi Resources Tbk. (‘Bumi’) on one of the largest and most complex debt restructuring transactions completed in Southeast Asia. On 11 December 2017 Bumi entered into the relevant agreements for the issuance of new loans and securities in exchange for USD4.5 billion of its financial debts, including three publicly issued bonds, six bank syndicated loans, and loans from both China Investment Corporation and China Development Bank. These debts have now been successfully exchanged for approximately USD2.3 billion of new debt, comprising senior loans and notes, mandatory convertible bonds and contingent value rights, in addition to new Bumi equity issued pursuant to a rights offering for the remainder of the amount.
As international and lead counsel to Bumi on its restructuring, Withers advised Bumi on all aspects of its restructuring from a section 210(10) stay proceeding (moratorium) in Singapore through a PKPU proceeding (an Indonesia court-sanctioned scheme of arrangement) in Jakarta and related multilateral negotiations with its creditors. In November 2016, the secured and unsecured creditors of Bumi voted overwhelmingly to approve a composition plan which was then ratified by the Central Jakarta Commercial Court. A voluntary petition for relief was subsequently granted by the US Bankruptcy Court recognizing the PKPU proceedings as a foreign main proceeding under Chapter 15 of the United States Bankruptcy Code. Withers then advised Bumi on implementing the composition plan by a rights offering for Bumi equity in Indonesia and four simultaneous exchange offers, including two international bond exchange offers.
The restructuring included the region’s first ever contingent value rights or CVRs (contingent on the price of coal) and the first CVR to be listed on the Singapore Stock Exchange (‘SGX’). In addition, Withers’ corporate tax team was able to successfully obtain for Bumi a 13(4) tax exemption for withholding tax from the Ministry of Finance (Singapore) on the senior secured notes and mandatory convertible bonds issued via Singapore incorporated and tax resident special purpose vehicles.
The firm provided US and English law advice to Bumi and coordinated local law advice for Indonesia, Singapore, Mauritius, Seychelles and Cayman Islands. Bumi’s various creditors were represented by a number of international law firms, including Kirkland & Ellis, Davis Polk & Wardwell and King & Wood Mallesons. Hogan Lovells represented The Bank of New York Mellon as exchange agent and tabulation agent and in its administrative agent capacities and Akin Gump Strauss Hauer & Feld represented a group of the convertible bondholders during the PKPU process and Madison Pacific in its administrative agent capacities.
The complexity of the transaction underscores the depth and breadth of Withers’ capabilities across many different practice areas and jurisdictions, including Singapore, US, England and Hong Kong. In Singapore, the firm has a specialist team of lawyers that focuses on Indonesian transactions and includes Bahasa Indonesia speakers.
The Withers team was led by Tahirah Ara, Banking and Corporate partner in our Singapore office. Tahirah was supported by a capital markets team that included Patricia Lee (partner, NY), Jeanne Solomon (NY), Mabel Tay (Singapore), Lawrence Altman (Singapore), Lee Wei Jia (Singapore) and Chrystle Kuek (Singapore); a banking team that included David Dannreuther (partner, London), Alix Prentice (partner, London), Angelene Teo (Singapore), Angel Yeo (Singapore), Erline Herrmann (Singapore), Lawrence Li (Hong Kong) and Khairi Miftahul (Singapore); and a tax team that included Stephen Banfield (partner, Singapore), Eric Roose (partner, Tokyo), James Brockway (Greenwich), Elliot Galler (New York) and Ari Byk (Greenwich).