Textile issuer PT Pan Brothers Tbk. again received a lawsuit from PT Bank Maybank Indonesia Tbk. This time, Bank Maybank filed a bankruptcy petition against the issuer with the stock code PBRX.

Citing information disclosure on Thursday (5/8/2021), PT Pan Brothers Tbk. received notification from the Central Jakarta Commercial Court that Bank Maybank has filed a bankruptcy petition against the company.

Meanwhile, the bankruptcy process is regulated by Law no. 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations or the Indonesian Bankruptcy Law.

"The Company wishes to assure all parties that it will do everything in its power to challenge and resolve this Bankruptcy Application to defend the rights of all our stakeholders, including most of our creditors who have supported us throughout the restructuring process," Pan Brothers management wrote.

PBRX said that the company's operational activities are currently still running, although they face challenges due to the extended cash conversion cycle throughout the industry due to the Covid-19 pandemic and a significant reduction in trade lines.

However, in the midst of the current unfavorable situation, PBRX reminded the company that it was able to increase sales by 4 percent on an annual basis to US$126.2 million in the first quarter of 2021.

The increase in sales was supported by the support and trust of buyers and suppliers who are willing to help PBRX manage its working capital needs so that operational activities can continue.

"It should also be noted that the company continues to pay interest on its debts," wrote PBRX.

Currently, PBRX is said to be in constant communication with syndicated and bilateral lenders for restructuring or changing debt terms.

Despite the actions taken by Maybank, PBRX wrote, the majority of lenders have agreed to the proposed terms and are in the process of credit approval.

Previously, the PKPU application submitted by Bank Maybank against PBRX was rejected by the Central Jakarta Commercial High Court. The legal considerations for the PKPU rejection decision were largely driven by the Moratorium Decision, in which the Singapore Court granted the Pan Brothers moratorium for 6 months, until 28 December 2021.

Taking into account the Singapore Moratorium Decision, the Panel of Judges stated that Maybank did not have the legal standing to file a PKPU application in this case. If the case is continued, this will make the examination of the case difficult (which is contrary to the requirements of the PKPU application as regulated in the Indonesian Bankruptcy Law).

“In parallel, we will continue to work on sanctions and scheme implementation in Singapore and focus on working towards a successful restructuring with the majority of syndicated and bilateral lenders supporting us, as well as our bondholders,” PBRX wrote.