supreme-court-rules-indah-kiat-bond-invalid

Supreme Court rules Indah Kiat bond invalid

Indonesia's Supreme Court puts the country's offshore borrowing prospects in doubt by ruling invalid the $500 million bond for APP subsidiary Indah Kiat Pulp & Paper.
When Indonesia's Supreme Court announced its decision to uphold the verdict of a lower court declaring the $500 million worth of bonds issued by Indah Kiat Pulp Paper invalid, you could almost hear the collective groan from AsiaÆs debt capital markets.

In an appeal to the countryÆs highest court, Gramercy Advisors and Oaktree Capital Management û both US-based hedge funds û had hoped to overturn the 2004 ruling by the Central Jakarta Court, which had itself upheld a civil claim in Bangkalis District Court a year earlier, that annulled the bonds on the basis that their issuance via an offshore special purpose vehicle SPV structure was unlawful.

At the risk of overstating the obvious,...
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