Sritex Workers Plan Demonstration at Supreme Court and Presidential Palace
By Agil Trisetiawan Putra for Detik.com, December 27, 2024
Sukoharjo, Indonesia — Workers of failed PT Sri Rejeki Isman Tbk (Sritex), one of Indonesia’s most iconic major textile exporters, recently declared bankrupt, are organizing a protest in Jakarta to seek clarity about their future. The workers plan to rally outside Indonesia’s Supreme Court, then move to the Presidential Palace, and several ministerial offices.
Slamet Kaswanto, the coordinator of the Sritex Workers’ Union, said the union is holding regular meetings to prepare for the demonstration. The group also intends to formally notify the Chief of Police about their planned actions in Jakarta.
“Our plan is to stage a demonstration at the Supreme Court (MA) next week, followed by a march to the Presidential Office to show our support for President Prabowo. Since President Prabowo has expressed his willingness to advocate for Sritex workers, we want to motivate him. This is not about making demands,” Slamet told reporters at the Sritex factory in Sukoharjo on Friday.
“We’ll also travel to the offices of several of the relevant government ministries as outlined by President Prabowo—there are four in total,” he said.
Rally Tied to Bankruptcy Review Appeal
Slamet explained that the demonstration at the Supreme Court is linked to Sritex’s ongoing attempt to file a judicial review (PK) action following after the court rejected its appeal against bankruptcy.
He emphasized that the protest will highlight the uncertain fate of tens of thousands of Sritex workers. Around 10,000 workers are expected to participate in the demonstration in Jakarta.
“Our main demand is to be able to continue to work. For us to keep working, the company has to remain operational,” Slamet said.
However, he acknowledged that the exact date of the protest remains uncertain due to the Christmas and New Year holidays. Slamet expressed hope that the required permits would soon be issued.
Workers to Fund the Protest
Regarding funding for the protest, Slamet noted that the workers themselves would cover the costs. “The funds will come from the workers. Yes, we’ll pool our resources. We’ll finalize the details in upcoming meetings as it involves a large number of people,” he explained.
Sritex’s Efforts to Able to Continue Trading
PT Sritex has been working for “going concern” status in order to restore frozen operations, but efforts have yet to yield results.
“The President has pledged to support us, and ensure the business continues to operate. But since the superior court appeal ruling, it remains unclear how that support will materialize. We’re advocating for going concern status to ensure the company’s sustainability, which requires cooperation between the insolvency administrator, creditors, and debtors. The government’s role is only as a facilitator, and that has not happened yet,” Slamet concluded.
Supreme Court Decision Finalizes Bankruptcy
Earlier this month, the Supreme Court officially declared PT Sri Rejeki Isman Tbk bankrupt, rejecting the company’s superior court appeal request to overturn the district court’s bankruptcy decision. The ruling, issued as Case Number 1345 K/PDTSUS-PAILIT/2024, makes the first instance bankruptcy verdict final and binding.
The superior court appeal was filed by PT Sritex in response to a bankruptcy ruling issued by the Semarang District Court in October 2024, after the company was unable to settle its debts.
This post is based on https://www.detik.com/jateng/bisnis/d-7705405/buruh-sritex-akan-patungan-buat-demo-ke-ma-istana-negara.
In earlier news…
What are the banking sector risks of Sritex bank debts of IDR12.7 trillion? Tempo.co
By Hammam Izzuddin and Aisha Shaidra for Tempo.co, November 1, 2024
TEMPO.CO, Jakarta – The bankruptcy of PT Sri Rejeki Isman Tbk or Sritex has left a number of debt records to banks. Banking observer Paul Sutaryono assessed that this could have a number of impacts on the banks that are creditors.
Paul said these banks have the potential to experience an increase in non-performing loans (NPL) because Sritex’s debt payment obligations are hampered. As a result, he said, the reserves for impairment losses, or CKPN, owned by each credit provider will [need to] continue to swell. “The reserves will continue to swell and will put pressure on current year profits,” Paul told Tempo on October 31, 2024.
As is known, Sritex’s long-term financial liabilities are dominated by bank debts of US$ 809,994,386 or Rp 12.7 trillion. In total, there are 28 banks that are creditors of the textile company that is currently filing a cassation appeal application over the bankruptcy decision at the Semarang Commercial Court.
Furthermore, Paul said that the swelling of reserves and pressure on current year profits could have an impact on the erosion of capital. In fact, according to him, capital is useful as a buffer or cushion in absorbing potential credit risk, market risk, operational risk and liquidity risk. “But that case will not cause a systemic impact on the banking industry,” he said.
According to him, the Sritex bankruptcy precedent has the potential to affect the interest of banking financing to the textile industry in the future. So, he said, the new government’s efforts to save Sritex are a strategic step. This is also to save the textile industry in general.
Several banks that are Sritex’s creditors have spoken out. The largest creditor, PT Bank Central Asia Tbk through EVP Corporate Communication & Social Responsibility BCA, Hera F Haryn, said that BCA respects the legal decision of the Semarang Commercial Court which declared Sritex or PT Sri Rejeki Isman Tbk. bankrupt. “BCA also respects the cassation appeal legal steps being filed by the debtor concerned,” said Hera in an official statement obtained by Tempo, Tuesday, October 29, 2024.
In addition, PT Bank Negara Indonesia (Persero) Tbk, which is also one of the creditors, also said that it continues to monitor the ongoing cassation appeal process. BNI Corporate Secretary, Okki Rushartomo, stated that BNI’s operations were not affected by the conditions experienced by Sritex. He explained that BNI has a fairly strong reserve ratio and has proven to have succeeded in maintaining better asset quality with a loan at risk ratio decreasing from 14.4 percent to 11.8 percent in the nine-month period to September 2024.
This article is based on https://bisnis.tempo.co/read/1935810/bagaimana-risiko-terhadap-perbankan-saat-sritex-masih-punya-utang-bank-rp127-triliun.
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First Big Test: The Steps Taken by Indonesia’s New Gov to Rescue Failing Major Textile Manufacturer PT Sritex, Tempo
From Antara and Yudono Yanuar for Tempo.co, October 30, 2024
TEMPO.CO, Jakarta – President Prabowo’s government has prepared measures to save Indonesia’s largest textile factory, Sritex, from bankruptcy to avoid layoffs, while still respecting the ongoing legal process.
Indonesia’s newly minted Coordinating Minister for Economic Affairs Airlangga Hartarto (Golkar Party) revealed the government’s measures for saving PT Sri Rejeki Isman or PT Sritex, including by ensuring that the company’s continues operations.
Continue to operate
“Now the important thing is that the company is still running. Customs has also given permission for its imports and exports, although the management is now under the supervision of an administrator,” said Coordinating Minister Airlangga during a press conference at the offices of the Coordinating Ministry for Economic Affairs in Jakarta on Wednesday, October 30, 2024.
For the next step, the government continues to monitor developments in the proceedings before the courts. As a country based on the rule of law, he said, the government will respect the proceedings in accord with the law currently in force.
Administrator
“The court has appointed an administrator and the government will wait for the results of the administrator’s action. But for the government’s part, we hope the company will continue to operate,” he said.
While waiting on the legal proceedings, the government is preparing measures that can be taken so that the labor-intensive industrial sector as a whole does not experience systematic problems.
Some time ago, a number of textile companies also experienced problems, but they have been restructured. “So, of course restructuring is one of the actions that is being encouraged by the government,” he said.
On the other hand, investment in the textile industry has shown an increase, especially in Central Java province in areas such as Kendal, with the orientation mostly aimed at exports. “In facing global competition, the key is productivity,” said Airlangga further.
Emergency limited cabinet meeting
President Prabowo previously asked his ministry’s officials to make efforts so that there are no layoffs of Sritex employees and so that the textile company continues to operate.
This was stated by Indonesia’s week-old Minister of Manpower, Bandung Institute of Technology academic, Yassierli (Prosperous Justice Party-PKS), after President Prabowo held a closed limited cabinet meeting with ministers including Coordinating Minister for Economic Affairs Airlangga Hartarto and long-serving Minister of Finance Sri Mulyani, yesterday.
Appeal
President Prabowo, said Minister Yassierli, stated that the government would not allow layoffs to occur of Sritex employees. The government believes that layoffs will not happen because the option to file an appeal against the decision of the Semarang Commercial Court will be taken.
Mounting Debt
Based on the consolidated financial report as of June 30, 2024, Sritex had total liabilities of US$ 1,597,894,876 (around Rp25 trillion). These liabilities are dominated by long-term liabilities of US$ 1,466,477,101 or around Rp23 trillion.
BCA largest of 28 creditor banks
In addition, Sritex’s long-term financial liabilities are dominated by bank debts of US$ 809,994,386 (Rp12.7 trillion). Bank Central Asia (BCA) is a creditor with a loan value of Rp1.12 trillion and is the largest of the 28 lending banks. Another major creditor is state-owed enterprise PT Bank Negara Indonesia (Persero) Tbk, with an exposure to Sritex of US$ 23,807,151 or around Rp374 billion.
BNI Corporate Secretary, Okki Rushartomo admitted that he continues to monitor developments in the Sritex bankruptcy proceedings in the Semarang District Court. Currently, he said, BNI is coordinating with the government, especially the Ministry of State-Owned Enterprises (BUMN), headed by newly re-appointed Widodo Administration Minister Eric Thohir, and the Ministry of Finance, to discuss next steps.
“We respect the ongoing process related to the filing of an cassation appeal that Sritex is currently filing,” Okki told Tempo on Tuesday, October 29, 2024.
Executive Vice President of Corporate Communication & Social Responsibility at BCA, Hera F Haryn, said that BCA respects the legal decision of the Semarang Commercial Court which declared PT Sri Rejeki Isman Tbk. bankrupt.
Hera said that BCA is open to coordinating with all the relevant stakeholders, including the administrator appointed by the court, to achieve the best solution for the debtors and creditors.
According to the President Director of PT Sritex, Iwan Kurniawan Lukminto, his party and the creditors had initially agreed to settle the debt through a Suspension of Debt Payment Obligations (PKPU).
Settlement
“There we went through a fairly long process, the debts that our company has have one arrangement, that is a homologation agreement or debt payment agreement. That is to say that for a debt for example of 5 years, then it was extended to 7 years, a debt of 6 years was extended to 9 years. So there was the opportunity of more time for payment,” said President Director of PT Sritex, Iwan Kurniawan Lukminto.
However, PT Indo Bharat Rayon subsequently filed for cancellation of the settlement and filed for bankruptcy. Hammam Izzuddin contributed to the writing of this article for Tempo.com.
This article is based on https://bisnis.tempo.co/read/1935189/ini-langkah-yang-diambil-pemerintahan-prabowo-dalam-menyelamatkan-sritex.
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