Restructuring and Strategic Initiatives related to Unlocking Value of ex-Indonesia Bank Restructuring Agency (IBRA)^s asset: Case study in PT Tuban Petrochemical Industries and its subsidiaries (2002 - 2019)
Hilman Prakosa

Universitas Indonesia

Abstract

This study aims to investigate how the restructuring process was applied to one of the assets of the ex-National Bank Restructuring Agency (^IBRA^), namely PT Tuban Petrochemical Industries (^Tuban Petro^) and its subsidiaries. The next objective in this research is to investigate what and how strategic initiatives are implemented to increase the value of Tuban Petro. The value will be calculated using the market multiples approach. To be able to achieve the research objectives, qualitative research is used using an explanatory case study approach and triangulation will be applied in collecting data, including unstructured interviews, structured interviews and archival studies. Tuban Petro restructuring has resolved post-crisis debt problems and established control over its source of payments in the form of share ownership and Multi Years Bond (^MYB^) instruments, as well as established strategic initiatives, perform management changes and create well support from stakeholders (shareholders, suppliers, distributors, creditors) to recover its value.
The significance of this research is to understand how the phenomenon of restructuring in extreme distress condition due to the impact of the monetary crisis could recover value and settle its obligations. This research also contributes as a case study for an alternative to solve extreme distress conditions in the future. Not much research has been done on ex-IBRA assets restructuring due to limited access of comprehensive information. In addition, there are not many case studies on a long restructuring process with a period of more than 15 years.

Keywords: Corporate Restructuring, Debt Restructuring, Financial Distress, Strategic Management, Valuation

Topic: Corporate Finance