What a week – that was the sentiment in Jakarta as President Prabowo Subianto moved to centralize exports of key commodities under Danantara.
Even the rank and file at Danantara were stumped by the former general’s fiery speech and wondered how the sovereign fund was going to implement his plan, according to a friend familiar with the matter.
The president’s attempt to rein in transfer pricing – which has long been a form of capital leakage out of Indonesia – and keep dollars onshore is not illogical. But as with many of his earlier initiatives, the ambition and time horizon are misaligned with the practical reality, according to a Jakarta-based financier.
Indonesia’s stock market slumped 3.5% while the rupiah continued weakening to around 17,700 per dollar following the announcement.
I wrote in April last year that capital had flowed out of the country partly due to fears of being caught on the wrong side of the power consolidation after the president took office. Some tycoons were unsure if there was a grand design to this operation, making it difficult to plan around it, a friend close to the tycoons said at the time.
Wealthy Indonesians already accumulated significant assets or investments in neighbouring Singapore, so they have been diversifying to offshore destinations such as the Middle East, the UK, mainland China and Hong Kong, according to bankers familiar with the matter.
While Indonesian tycoons are hedging their exposure for safety reasons, they are unlikely to completely abandon business in Indonesia as some of them have built up scale that’s hard to replicate elsewhere.
Companies to Watch
🔸 Garuda Indonesia
Garuda Indonesia has been exploring options as it’s pummelled by the spike in fuel costs, according to several friends familiar with the matter. While the national carrier cannot just look at the fundraising route this time, a post-PKPU restructuring will likely be challenging – as I’ve flagged throughout the past year.
A key area of consideration is the negative optics associated with pursuing a fourth restructuring so soon after Danantara injected USD 1.4 billion into the airline. However, the clock is ticking for Garuda as its liquidity is shrinking rapidly.
🔸 Whoosh
The China-backed Jakarta-Bandung high-speed rail known as Whoosh is another state project with ballooning costs and uncertain recovery. I wrote on 14 April 2025 that state-owned builder Wijaya Karya was headed for a restructuring redux due to the infrastructure budget cuts and cost over-runs at Whoosh.
I also noted on 11 October 2025 that the Indonesian SOE method of rolling over loans or converting debt into equity may not work with the Chinese. It’s possible for Indonesia to offer the Jakarta-Surabaya rail line to China in return for some form of forbearance on Whoosh, though whether or not it can make money is still a question mark.
🔸 Modernland Realty
I wrote on 16 December 2024 that even if Modernland Realty could pull off its second round of restructuring, the Indonesian property developer was reliant on asset sales to jump over a maturity wall in 2027.
Quantuma was appointed to procure asset sales after Modernland’s restructuring was implemented in March 2025 via a Singapore scheme of arrangement, according to the advisory firm’s press release. While the sale process is ongoing, the developer has to service an expensive bridge loan from Bank JTrust Indonesia and ADM Capital’s Eight Rubies.
🔸 Indika Energy
The energy company continues diversifying away from coal by setting up an electricity distribution unit, Electra Jaringan Indonesia (EJI). The new subsidiary’s business activities will include retail sales of electricity to end consumers, according to its stock exchange filing.
Indika also issued USD 100 million 8.75% notes due 2029 to fund the development of its gold mining project in South Sulawesi. The company has a track record as a repeat issuer in the international bond market, so it’s not surprising that it was able to complete the latest deal.
People to Watch
There’s a merry-go-round going on in Indonesia’s restructuring and insolvency scene, as some firms that were hit by departures have to poach from other firms to replenish their ranks.
The trend is driven by a mix of reasons: a couple of individuals are embarking on their ventures while others are trying out a different firm or sector. The domino effect is still playing out and it’s unclear who’ll be the net gainer/loser when the dust settles.
Acrostics Asia is an independent credit intelligence provider that connects the dots across Asian sovereigns, private credit and restructurings.