The Debt Collapse Of Indonesia's Largest Company

Asia Pulp & Paper was once touted as one of Indonesia's largest-ever companies. Yet due to extraordinary debt-driven growth, the company would soon default.

Narrated by Tom Mckay
Video Edited by iyanbriandi

Timestamp(s):
0:00 The Debt Collapse
2:28 The Beginning
4:47 The Asian Financial Crisis
6:26 Company Restructuring

Brought to you by the Behind Asian Team.

[BehindAsia]

Asia Pulp & Paper had once defaulted on over $13.9 billion dollars worth of loans. Yet, the company survived after decades of restructuring. Do you think that there will come a day when a corporation in Indonesia would also face the same fate? Let us know down below!

[coffeelabandhydrophonic]

The Company can survive because the Indonesian Government was helping them, especially under Soeharto Administration (New Order). Sinar Mas group has a close relationship with Soeharto Family (Cendana Family), so Indonesia received a bail-out from IMF to recover the economy at that time and such money was used to help corporate like Sinar Mas. Lucky for them 😅

[johntanaka]

This is a story of the past. Right now, this company is a much more healthy conservative company. The valuation is cheap and profit keep growing

[mjuneoginn]

Not forget to mention: their controversial contribution to the degradation of their forests brought about by their means and ways of procuring wood for their paper products

[the_officials]

Bro, this is basically a tale of kings on a throne of silt and sand, you might be high and mighty till your throne crumbles (literally!)

[maumuapa]

legendary companies, ups and downs, lots of conspiracy theories about big companies in Indonesia in the past.
but now we have a way to deal with people who are greedy & too ambitious because on the other hand it is profitable & detrimental.

[tdev]

Conversion to digital also reduced the global demand for paper. If you incorrectly peg your growth on aggressive increase demand then you've made a big strategic mistake in your attempt to bail the company.

[juliobali]

The biggest problem in all the cases is CORRUPTION, LOBBING AND MISSMANAGMENT.

[harukrentz]

Many Indonesian companies faced bankruptcy due to collapse of Indonesian currency, IDR. The currency collapse itself can be trace back to early 90's when soeharto's gov initiated fixed rate exchange between IDR and USD, iirc it was around 2000 IDR per 1$. The policy emboldened many Indonesian conglomerates to take more gamble by adding more foreign debt into their portofolio. However the Indo gov soon running out of foreign reservess after series of speculative actions from notorious traders like Soros. This forced the gov to seek IMF help and IMF demanded the floating exchange rate in return, this caused chaos in the market as USD value skyrocketed (from 2.500 to 18.000IDR in less than one week) companies suddenly need to make more income just to pay their debts.

[KartikaSari-lrkp]

App was my prior company's customer. The biggest conglomerate in pulp and paper... we supplied chemicals to stabilise the pulp.

[Omgirang]

Giant corps are always sketchy. Their bank took around $3k of my fund as a "trading loss". Not to mention, they had a scandal of burning forests in Sumatra. Although lots of corps do this, this company is still fishy.

[VieKrohtiel]

I live in indonesia and i knew about this company as it have it stamps of logo on the back of almost every indonesian kids notebook
But i didn't know this company have a huge problem like this when i'm still a baby
Thanks for sharing this indormation i could definitely use this for not taking too much debt, even if it is for a productive stuff

[ddtfundamental]

I sold APP paper at 90pct just 2 weeks before APP got defaulted.

[somesome]

Laws on confiscation of assets for convicts of corruption and money laundering.

This is the law that the Indonesian Parliament is most afraid of.
Because it was requested by the President, but it was never discussed and promulgated.

[wisfina]

After eka cipta passed away. Heritage conflict betwen his sons make things more complicated. He has many wives and sons and everyone want bigger part of his fortune 😢

[sandyliuzhang]

Indonesia, if you have money you can buy law. Corruption is rampant. You said right, a lot of mismanagement

[alexdananjaya]

Bbrp komentar menunjukkan ga nonton videonya atau nonton tapi ga paham. Ini kisahnya terjadi di masa lalu, bukan sekarang.

[hadimeidiyan]

Just look at the low Dividend Yield, even 0%. It's impossible not to profit if you produce/operate in Indonesia, unless there is corruption.

[subashpadiyar]

Actually debt creates money(in any bank) when everone is on the same page and follows due diligence in their work

[jatibeningkoi]

Debt/loan with interests will lead to disaster..