Why was the restructuring required?
The situation concerned PT Bumi Resources, which was an Indonesian listed firm or coal producer with a number of operating mines setting up of prospects around the world.
Now in around about 2014, probably for a few years before that, Bumi was hit by declining thermal coal prices - like a lot of producers around the world.
Bumi however had a very heavy debt load, roughly US$4.2 billion at that stage - give or take a few hundred million.
They tried to negotiate a consensual restructure with their lenders. However, they weren’t able to do that quite at the time as you can appreciate talking to a very large number of lenders. Consequently they ended up with in insolvency courts, following a procedure called the Indonesian PKPU procedure.
What was King & Wood Mallesons’ Role?
We acted for China Development Bank.
China Development Bank (CDB) had lent around US$600 million to Bumi in 2009 and they were obviously caught up in the restructuring.
As a Chinese State‑owned bank, CDB were subject to a number of regulatory requirements which mean that the restructuring proposal as put to the other banks was more difficult for them to implement.
What did King & Wood Mallesons bring to the equation?
Now I genuinely believe that KWM was uniquely placed to assist China Development Bank in this role. The reason for that is two‑fold:
- I don’t think any other law firm has the level of depth and understanding of Chinese regulatory requirements, as well as how a bank likes CDB would operate in practice when facing a restructuring situation.
- The second thing of course we bring to the table was our expertise in negotiating restructurings and new debt facilities following restructurings.