Davomas bondholders win court ruling

Central Jakarta Commercial Court has ruled in favor of Java Investment Advisory Group and Precise Circle Limited for Suspension of Debt Payment Obligation (PKPU) on cocoa processor Davomas Abadi. 

Chief justice Makassau said both Java and Precise are legitimate bondholders of Davomas International Finance Company Pte Ltd, a wholly-owned subsidiary of Davomas Abadi, Bisnis Indonesia reported.

PKPU is the formal corporate restructuring governed by Law No. 37 of 2004 concerning Bankruptcy. The bankruptcy law provides a debtor which is unable to pay its debts as they fall due may apply to the Commercial Court for a suspension of payments to allow the debtor time to submit a composition plan (how the debt will be restructured).

Davomas International issued US$238 million 11% bonds due 2011. Davomas defaulted the interest payment scheduled May 8, 2009.

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