As of 2025, Barito Pacific and its subsidiaries demonstrate strong financial health, evidenced by a 25% year-over-year revenue increase to US$774 million, a 114% surge in net profit to US$30 million in Q1, and a solid idA+ credit rating with a stable outlook from Pefindo.
— Indonesia —
resilient. inclusive. transformative.
Barito Pacific's Strategic Debt Restructuring: Navigating Post-Asian Financial Crisis Recovery in Indonesia
"The Indonesian Bank Restructuring Agency (IBRA) was established to manage and resolve non-performing loans, aiming to stabilize the financial sector post-crisis."
— International Monetary Fund (IMF), 2000
Challenge
In the aftermath of the 1997 Asian financial crisis, Indonesia's corporate sector grappled with overwhelming debt burdens. Barito Pacific, a prominent publicly listed conglomerate, faced significant financial challenges. GG International, through its specialist legal and financial group, fielded a high-level advisory team led by Shaan Stevens and Matte Birchler, in partnership with Dr Angus McPherson, to provide expert strategic advice. Key challenges included:
- Substantial Debt Exposure: Accumulated debts exceeding USD 400 million threatened the company's solvency. See the detailed report here (CIFOR-ICRAF)
- Currency Volatility: The steep depreciation of the Indonesian Rupiah escalated the cost of servicing foreign-denominated debts.
- Regulatory Pressures: Engagements with the Indonesian Bank Restructuring Agency (IBRA) necessitated adherence to stringent restructuring protocols aligned with IMF guidelines.
Strategy
To address these challenges, a comprehensive financial due diligence and restructuring plan was implemented:
- Debt Assessment: Conducted a thorough analysis of Barito Pacific's debt portfolio to identify sustainable and non-sustainable obligations.
- Stakeholder Negotiations: Engaged in strategic discussions with IBRA to restructure existing debts, aiming for terms that would ensure the company's viability while satisfying regulatory requirements. See the detailed report here (jawawa.id)
- IMF Compliance: Ensured that the restructuring plan met the conditions set forth by the IMF, facilitating continued support and confidence from international stakeholders.
Transformation
The restructuring initiative yielded significant positive outcomes:
- Debt Realignment: Successfully restructured a substantial portion of the company's debt, aligning repayment schedules with projected cash flows.
- Operational Stability: Restored financial stability enabled Barito Pacific to maintain operations and protect employment during a period of economic uncertainty.
- Investor Confidence:Demonstrated commitment to financial prudence and transparency, bolstering investor trust and positioning the company for future growth.
Strategic debt restructuring, aligned with regulatory frameworks and international guidelines, was pivotal in restoring Barito Pacific's robust financial health and operational continuity in a post-crisis environment.