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arine service provider PT Jasmanindo has formally submitted the postponement of debt payment petition against shipping company PT Humpuss Intermoda Transportasi (HITS) in its bid to block the latter’s debt payment to other creditors.

Theo Lekatompessy, HITS president director, said in Jakarta on Thursday that Jasmanindo submitted the petition, locally known as PKPU, to the Commercial Court on Oct. 2. The first trial for the petition will be carried out on Oct. 8, he added.

 “It seems that the company [Jasmanindo] is worried that it won’t get payment if we settle our debts through liquidators,” Theo said on Thursday.

Jasmanindo signed an agreement in 2010 to provide docking services to HITS in a contract worth Rp 3 billion (US$312,825). HITS has paid about 80 percent of its fees to Jasmanindo.

HITS, a subsidiary of PT Humpuss, is controlled by Hutomo Mandala Putra, the youngest son of former president Soeharto. HITS is working on the debt settlement that involves three creditors demanding payment of unpaid lease fees and damages for the early termination of a lease agreed by its subsidiary Humpuss Sea Transport Pte. Ltd. (HST) in 2009.

The three creditors are Greek Empire Chemical Tanker Holdings, Norwegian Parbulk II and South Korean Hanjin Shipping.

The creditors took HST to the London and Singapore bankruptcy courts for non-payment of a financial obligation. The courts accepted the request and declared HST bankrupt. Corporate restructuring advisors Cosimo Borelli and Jason Kardachi are acting as liquidators.

After negotiations the liquidators proposed, in August, a settlement stipulating that HITS must pay $72 million within one year to settle the dispute. However, HITS has said that, according to an independent appraisal, it would only be able to generate $34 million cash over a 15-year-period and would not be able to support the payment.

In an extraordinary general meeting of shareholders held last September, HITS approved actions to generate extra money including a rights issue, selling of treasury stocks, obtaining loans, issuing convertible bonds and selling the company’s assets. However, the amount to be raised would not be enough to support payment to the three creditors.

After the meeting, HITS said that it would likely seek further negotiations with the liquidators in an attempt to reduce the amount of money the company should pay and determine a better payment schedule. According to Theo, the liquidators will not move on their position of the amount or time frame of the payment.

“The PKPU is a blessing in disguise because we will have a more concrete time frame for debt settlement, the decision will be legally binding and the settlement would be conducted multilaterally with all creditors, including Borelli [liquidators],” Theo said.

According to the country’s law on bankruptcy and postponement of debt payment, the suspension cannot exceed 270 days of the court’s ruling in favor of the PKPU.

During the suspension, all of HITS creditors must create settlement proposals to accommodate all creditors. It also means that the liquidators will have determine how much each party will receive in debt settlement when HITS’ financial capability is taken into consideration.

“We are expecting that it [the debt settlement] will be finished before the end of the year so that we can focus on our business,” Theo said.