Bakrie Plantations Wins Shareholder Backing for $274 Million Debt-to-Equity Swap, Slashing Leverage

JAKARTA, Investortrust.id — PT Bakrie Sumatera Plantations Tbk (IDX: UNSP), one of Indonesia's listed palm oil producers, has secured shareholder approval for a Rp4.35 trillion ($274 million) private placement that will convert debt into equity, dramatically strengthening its balance sheet after years of heavy leverage.

The debt restructuring, approved at an extraordinary shareholders' meeting on Friday, will see creditors exchange outstanding loans for newly issued Series B shares priced at Rp300 apiece. The move represents one of the company's most significant financial restructurings in recent years.

The transaction substantially reduces financial risk for Bakrie Plantations, improving its ability to generate cash, access financing, and invest in operations. While existing shareholders will suffer heavy dilution, investors often view debt-for-equity swaps favorably when they restore a company's financial sustainability and reduce bankruptcy risk.

The restructuring also underscores a broader trend among Indonesian corporates using balance-sheet repairs to position themselves for higher commodity prices and renewed investment.

Shareholders representing 54.18% of the company's outstanding shares attended the meeting, with 99.99% voting in favor of all proposed resolutions, including the private placement, according to Director and Investor Relations head Andi W. Setianto.

Following completion of the transaction, Bakrie Plantations expects its debt-to-total-assets ratio to improve sharply from 2.51 times to 1.26 times.

The company also projects its liquidity ratio—measured as current assets relative to short-term liabilities—to double from 11% to 22%, reflecting a significantly stronger short-term financial position.

Lower debt obligations are expected to ease pressure on operating cash flow, giving management greater flexibility to fund future business activities without relying as heavily on external financing.

The restructuring comes at a cost for existing investors. Bakrie Plantations said current shareholders' ownership stakes will be diluted by approximately 85.3% once the new Series B shares are issued to creditors.

Management said the capital increase is intended solely to improve the company's financial position. The issue price of Rp300 per share was determined in accordance with Indonesia Stock Exchange regulations governing private placements and was negotiated with creditors under arm's-length principles.

The company added that the pricing complies with exchange rules and was structured to protect the interests of minority shareholders while facilitating the balance-sheet restructuring.