Counsel in Indonesia have pointed to the difficulty facing
foreign lenders in seeking legal recourse against their onshore
borrowers amid the global commodity price glut.
Indonesian oil and gas companies, which have found
themselves knee-deep in restructurings in recent months, have
been further hit by regulatory hurdles that make the act of
taking security over assets a near impossibility.
Indonesia saw the successful closure of one of the
region’s biggest restructuring deals involving
shipping giant Berlian Laju Tanker, in which the restructuring
was settled out of court, last December.
"Regulated industries in Indonesia present a whole series of
challenges in relation to restructuring because it is often not
possible to take security over the key operating assets," said
Timothy Hia, partner at Latham & Watkins in Singapore,
adding that "a lender or creditor seeking to obtain some form
of recourse against onshore oil and gas or other similar