Prabowo asks top four ministers to save local textile giants

The government will try its best to save the textile company PT Sri Rejeki Isman (Sritex), this was stated by the Minister of Industry after the District Court of Semarang (PN) declared the bankruptcy of Sritex not long ago.Saving Sritex was a direct order from President Prabowo, who asked several relevant technical departments to conduct an in-depth study to save Sritex.President Prabowo has ordered the Minister of Industry, the Minister of Finance, the Minister of State Enterprises BUMN and the Minister of Manpower to immediately look into the many options and plans to save Sritex.In addition to this, the government's top priority right now is to save Sritex employees from the threat of layoffs (PHK). The government will take immediate steps to keep the company operating and avoid layoffs, and this rescue package will be presented as soon as the four ministries have worked out the rescue method. Earlier PT Sri Rejeki Isman Tbk (SRIL) or Sritex has appealed the court's decision. In the decision, the District Court of Semarang declared Sritex and three of its subsidiaries, PT Sinar Pantja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya, insolvent.The management of Sritex, in a written statement, said that they respected the legal decision and reacted quickly , conducting internal reorganization and consolidation with relevant stakeholders. They have filed an appeal to resolve the matter appropriately and to ensure that the rights of the stakeholders are met.Sritex management said that it is a duty to their creditors, customers, employees and suppliers who have collectively supported the company's business. Some 14,112 employees are currently directly affected by the company's situation, out of a total of 50,000 employees in the Sritex Group. Meanwhile, Sritex has declared bankruptcy after falling deeper into debt problems in recent years. As of the end of last year, Sritex's short-term liabilities stood at $113.02 million, of which $11 million was short-term bank debt from the Bank of Central Asia (BBCA). Meanwhile, of the $1.49 billion in long-term liabilities, $858.05 million was bank debt.

Most of the long-term bank debt is syndicated debt (Citigroup, DBS, HSBC and Hang Seng Bank) valued at $330 million. In addition to this, BCA, Bank QNB Indonesia, Citibank Indonesia, Bank BJB Indonesia and Mizuho Bank are listed as the largest creditors with SRIL liabilities of more than $30 million each. Apart from the five banks mentioned above, the company also has debts to 19 other banks, most of which are foreign banks or foreign private banks. In its latest disclosure, the textile company said that its mounting debt has led to a situation where employees are being laid off. As of March 31, 2024, details of the business's debt were outstanding and valued at $31.67 million, an increase of $8.7 million from December 2023. Debt due within 30 days then rises to $0.63 million. Then it rose $1.2 million for 31-90 days and $468,000 for 91-180 days. In addition to this, SRIL restructured its short-term debt securities (MTNs), which initially matured from May 18, 2021, to August 29, 2027, as well. Due to cash issues, the company proposed to relax MTN principal and interest payments. These financial difficulties ultimately forced Sritex to implement layoffs, and over the past year the company has laid off 2,232 employees, down from 16,370 at the end of 2022 to 14,138 remaining at the end of last year.