Distressed textile giant PT Pan Brothers is closing in on its debt restructuring after seven months of negotiation with creditors, according to people familiar with the matter, as it works to avoid becoming the second Indonesian clothesmaker to be declared bankrupt this year.
Bloomberg
Creditors will vote Wednesday on the latest 8.6 trillion rupiah ($537 million) restructuring proposal by Pan Brothers, Bloomberg News reported earlier. It initially sought to take votes last month, but delayed the process after facing push-backs from some creditors including SC Lowy, as they demanded better terms, according to the people familiar who declined to be identified.
Key creditors including SC Lowy have given their verbal support for the latest plan, one of the people familiar said. If the votes pass on Wednesday, that could help Pan Brothers avert the fate of bankruptcy when the Indonesian government has vowed to save jobs in the struggling sector.
Among the key debt that the company is looking to settle are $171.1 million in outstanding principal on a dollar-denominated bond that will mature in December next year and $138.4 million syndicated facilities, according to a document seen by Bloomberg News. Under the revised proposal, bondholders are presented with an additional settlement option, which is to convert the existing notes with 7.625% coupon into entirely new ones with 15-year maturity at 1% annual interest, the document shows.
Pan Brothers didn’t respond to requests from Bloomberg News seeking comments. SC Lowy said in an emailed response that it’s successfully resolved all issues and is supportive of Pan Brothers’ debt plan.
The bondholders previously only had one option, which is to turn some part of the notes into new papers with 11-year maturity and and the rest into new mandatory convertible bonds, according to an exchange filing in November.
The revised proposal came after Coordinating Minister of Economic Affairs Airlangga Hartarto summoned representatives of the company and SC Lowy’s chief investment officer Soo Cheon Lee, for a meeting on Dec. 5 in Jakarta, according to people familiar with the matter. Hartarto said at the meeting that the government doesn’t want to see job losses from the current debt problem and will not bail out Pan Brothers should it fall into bankruptcy, according to one of the people familiar.
Hartarto declined to comment. SC Lowy declined to comment on the meeting with the minister “as it was a confidential discussion.”
Pan Brothers, which has supplied Ralph Lauren, Prada, Uniqlo and Adidas, currently employs around 27,000 people. Textile and clothing-related industries are the second-biggest employers in Indonesia’s manufacturing sector after food, according to the country’s statistics bureau.
The government previously gave its assurance that there would be no layoffs after PT Sri Rejeki Isman, a rival of Pan Brothers, was declared bankrupt by an Indonesian court in October. It also allowed Sri Rejeki to resume import and export operations despite the bankruptcy verdict.
An open intervention by the government to prop up a non-state owned company rarely happens in Indonesia. Still, the recent meetings may give signal of the president’s unwillingness to see another major bankruptcy and layoffs in the early days on his administration.
“The government doesn’t want to see bankruptcy and layoffs in the textile sector as the negative impact could reverberate to the wider economy,” according to Teddy Hariyanto, senior credit analyst at PT Mandiri Sekuritas. “Significant layoffs in this sector will push up overall unemployment numbers and that could become political issue for the new government.”
German retail sales rose in 2024, but growth should be more modest this year due to the high level of uncertainty, according to retail association HDE.
Last year, retail sales rose 1.1% compared to the previous year in inflation-adjusted terms, official data showed on Friday. The HDE forecasts 0.5% growth in real terms this year.
“Consumption and the retail sector in Germany will not really gain momentum in 2025 either,” said HDE managing director Stefan Genth. “There is simply too much uncertainty,” he said. “Wars, high energy costs and overall economic stagnation are a toxic cocktail for consumption.”
In nominal terms, retail sales rose by 2.5% in 2024 and are expected to grow by 2.0% in 2025, according to HDE’s forecast.
The latest HDE survey with 700 retailers shows that 22% of respondents expect sales to increase this year, while almost half of them expect results to be below the previous year’s level.
In December, retail sales fell by 1.6% compared with the previous month, official data showed. Analysts had predicted a 0.2% increase.
Many big names in UK retail had a good Christmas season — despite the sector being generally sluggish — but it seems John Lewis Partnership (JLP) may not have been one of them.
The retailer — which operates its eponymous department stores and webstore, plus Waitrose supermarkets — has missed its profit target after a disappointing festive season.
It hasn’t shared any info officially but internal documents seen by The Telegraph suggest bad news to come when it does release its results.
Those internal documents have only been shared with staff so far with the company saying that sales have fallen short of expectations and it’s unlikely to achieve its hoped-for £131 million full-year profit.
The company is said to have blamed “lower consumer confidence and weaker than expected market confidence” for the sales miss in the month to 21 December, although also the fact that key trading days fell outside the period.
Sales targets were missed at both of the firm’s chains, although the newspaper said it still claimed it outperformed rivals and staff should be “proud of our performance”.
It will be interesting therefore to see exactly what its figures were as a number of rivals have actually reported a good Christmas. If its stores have beaten other supermarkets and chains like M&S, perhaps its targets were too ambitious in the first place.
We won’t know for a while, but we do know that with M&S resurgent, JLP’s supermarkets and department stores have lost some of their lustre as the destination of choice for Britain’s middle classes.
So what were the firm’s benchmarks? Back in September it had said it was seeing strong demand and expected a significant rise in profits for the year to January. The prior year’s pre-tax profit had been £56 million and the year before that it made a loss.
It had also talked about its turnaround efforts paying off and that it was seeing a “considerable improvement” in performance, with the John Lewis chain in particular expected to benefit from a buoyant second half.
It’s been rumoured for some time that he would exit the label but it’s not yet known what his next step will be.
Jones has been widely praised for his work at Dior with his latest men’s collection shown this month being hailed as a success.
He’s been a key creative at LVMH having also designed its Fendi women’s collections. And he helmed Louis Vuitton’s menswear before he joined Dior.
The company said it “wishes to express its deepest gratitude” to the designer “who has accelerated the development of Men’s collections internationally and has greatly contributed to the worldwide influence of the House by creating an inspiring wardrobe that is both classic and contemporary, and connected to some artists of our time”.
And Delphine Arnault, who’s chairman and CEO of Christian Dior Couture,added: “I am extremely grateful for the remarkable work done by Kim Jones, his studio, and the ateliers. With all his talent and creativity, he has constantly reinterpreted the House’s heritage with genuine freedom of tone and surprising, highly desirable artistic collaborations.”
Jones meanwhile called it a “true honour to have been able to create my collections within the House of Dior, a symbol of absolute excellence. I express my deep gratitude to my studio and the ateliers who have accompanied me on this wonderful journey. They have brought my creations to life. I would also like to take this opportunity to thank the artists and friends I have met through my collaborations. Lastly, I feel sincere gratitude towards Bernard and Delphine Arnault, who have given me their full support.”
Entertainment8 years ago