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View all search resultsAnalysis: Financial distress of Bakrie’s media arm has not come to an end
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Anindya Bakrie (right), who was elected chairman of the Indonesian Chamber of Commerce and Industry (Kadin) in a recent extraordinary congress, takes part in a discussion during the Milken Asia Summit, in Singapore on Sept. 18. (Antara/Private archive)
T
he plight of the Bakrie Group has not come to an end with its media arm entangled in massive debts. As the group’s crown prince forcefully took over the chairmanship of the Indonesian Chamber of Commerce and Industry (Kadin), the Central Jakarta Commercial Court granted an extension of a debt payment suspension for four media companies under the Bakrie Group.
As the due time for the debt payment suspension approaches, four Bakrie news media companies – PT Visi Media Asia (VIVA), PT Intermedia Capital (MDIA), PT Cakrawala Andalas Televisi (ANTV) and PT Lativi Mediakarya (tvOne) – could possibly go bankrupt if an amicable settlement with creditors does not come soon, before the end of this year.
The longstanding debt payment problem has been rolling on since early this year when PT Laras Nugraha Cipta, consisting of 12 foreign creditors to the Bakrie media companies with loans totalling Rp 8.79 trillion (US$550 million), filed a suspension of debt payment obligations (PKPU) on Feb. 12, at the Commercial Court at the Central Jakarta District Court against the four media companies.
In response to the lawsuit, the Commercial Court gave the four media companies a temporary PKPU for a period of 45 days. Since then the court has given several PKPU extensions. Lastly, on Sept. 20, the four Bakrie media companies requested another PKPU extension of 45 days, which was approved by the court.
According to the 2004 Bankruptcy Law, a PKPU and extensions may be given for 270 days from the first suspension of payment granted by the court. This means that the four Bakrie media companies and their creditors must agree on the company’s debt restructuring plan as part of the PKPU procedure on the next court hearing on Nov. 4. Otherwise, these four companies could be declared bankrupt by the court.
The Bakrie Group has a long history of survival. The Bakrie Group survived the Asian financial crisis of the late 1990s. Then, the group’s crown jewel coal mining company PT Bumi Resources (BUMI), which rose to its height as the biggest publicly listed company in 2008 with a stock price reaching over Rp 8,000 a share, slumped to its bottom at Rp 50 per share in 2016 due to debt problems. BUMI’s low share price remained until 2022 when the Salim Grouped entered BUMI and its share price finally took off.
Unlike BUMI, which is in the coal business, Bakrie news media companies have encountered tightening competition with disruption in the media, especially in advertisement. Such unfavorable conditions saw VIVA, the biggest Bakrie media arm, suffer losses since 2018 and debt leverage levels spiking. In 2022, the company’s net losses reached Rp 1.7 trillion and the leverage level reached 24.91. As per the third quarter 2023, the company had suffered losses of Rp 887 billion. Neither VIVA nor MDIA, have released their annual reports for year 2023, and they have not held their annual general shareholders meeting. As a result, the Indonesia Stock Exchange (IDX) suspended their trading on July 1.
