PT Sri Rejeki Isman Tbk (SRIL) is currently facing three processes of Postponing Debt Payment Obligations (PKPU) in Indonesia, Singapore and the United States.

Looking at Sritex's financial statements as of the end of December 2020, Sritex's ability to pay short-term debt with available cash is indeed worrying. This can be seen from Sritex's cash equivalents, which only amounted to US$ 187.64 million, while its short-term debt reached US$ 398.35 million.

However, according to the Director of Avere Investama, Teguh Hidayat, Sritex's short-term assets are actually quite large, which comes from its accounts receivable. He considered, at first glance from the liquidity side there is no problem.

However, looking further at the 2020 financial statements, Sritex's cash flow was negative. "This means that SRIL's income and net profit are not cash in nature, they are still only committed, causing receivables to increase," he explained.

He continued, with the current prolonged pandemic conditions, there are doubts that Sritex customers can pay off the company's trade receivables. This causes the company to have difficulty paying its short-term debts because Sritex's income is generally not cash.

"So, if we review it again, the big problem with Sritex is that the company cannot collect receivables from its customers, causing the company to have difficulty paying its short-term debts," he explained.

On the other hand, Teguh said that the increase in short-term debt of the issuer codenamed SRIL was because the company took advantage of the momentum amid the price decline due to the Covid-19 pandemic. "It's just that, until today, the problem of the pandemic has not ended, resulting in the raw materials that have piled up unable to be processed because the demand for textiles is currently down," he said

In 2020, Sritex did record a significant increase in short-term debt, which was up to 118.2% year on year (yoy), from US$ 182.54 million in 2019 to US$ 398.35 million. The increase was in line with the increase in short-term bank debt Sritex by 310.6% yoy to US$ 277.51 million from the previous US$ 67.59 million.

From the management itself, SRIL's Communication Head, Joy Citradewi, said that the PKPU process in Indonesia, the Panel of Judges of the Commercial Court at the Semarang District Court, has decided to grant the Company's request to extend the PKPU process for the next 90 days.

Then, for the process in Singapore on May 21, 2021, the Singapore Court has provided protection from all law enforcement actions against the Company's subsidiaries in Singapore with the aim that the restructuring process can run as a whole.

Furthermore, in the United States On June 10, 2021, the United States Bankruptcy Court granted a temporary moratorium under Chapter 15 of the United States Bankruptcy Act. This is to protect the Company and its subsidiaries in Indonesia and Singapore from law enforcement actions in the United States prior to approval of the Chapter 15 petition.

The temporary moratorium is expected to harmonize the protections that apply in Indonesia and Singapore. "At the same time creating a conducive atmosphere in which the company and its subsidiaries can make the best restructuring efforts for all stakeholders," he added.