Re PT MNC Investama TBK: Moratorium Extension & Standing under Section 211B Companies Act

The Singapore High Court heard an application by PT MNC Investama TBK, an Indonesian investment company listed on the Indonesia Stock Exchange, for an extension of a moratorium under Section 211B of the Companies Act. The court, presided over by Justice Aedit Abdullah, granted a two-month extension of the moratorium until August 2020, finding that the applicant had the requisite standing to make the application because its Notes were traded on the Singapore Stock Exchange. The primary legal issue was whether the foreign company had a substantial connection to Singapore to be eligible for moratorium protection.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Orders sought granted.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court grants PT MNC Investama TBK a moratorium extension, finding a substantial connection to Singapore due to its Notes being traded on the SGX.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
PT MNC Investama TBKApplicantCorporationOrders sought grantedWonTan Mei Yen, Thenuga Vijakumar

3. Judges

Judge NameTitleDelivered Judgment
Aedit AbdullahJudgeYes

4. Counsels

Counsel NameOrganization
Tan Mei YenOon & Bazul LLP
Thenuga VijakumarOon & Bazul LLP

4. Facts

  1. The Applicant is an investment company listed on the Indonesia Stock Exchange.
  2. The Applicant issued USD$231,000,000 worth of 9% Senior Secured Notes due in May 2021.
  3. The Notes are listed on the Singapore Stock Exchange.
  4. The 2020 Coronavirus pandemic has gravely affected the Applicant and its subsidiaries.
  5. The Applicant's income is primarily denominated in Indonesian Rupiah while its liabilities are in US Dollars.
  6. The Applicant was unable to top up the debt servicing account prior to the making of an interest payment due in May 2020.
  7. The Applicant intends to propose a scheme of arrangement under s 210(1) of the Companies Act.

5. Formal Citations

  1. Re PT MNC Investama TBK, Originating Summons 455 of 2020, [2020] SGHC 149

6. Timeline

DateEvent
Indenture dated
Interest payment due
Video meeting held with some noteholders
Originating Summons 455 of 2020 filed
Hearing of application
Judgment issued
Moratorium extended until

7. Legal Issues

  1. Standing to apply for moratorium
    • Outcome: The court held that the applicant had a substantial connection with Singapore within the meaning of s 351(1)(d) of the Companies Act, and therefore had the requisite standing to seek a moratorium under s 211B of the said Act.
    • Category: Procedural
    • Sub-Issues:
      • Substantial connection to Singapore
    • Related Cases:
      • [2018] 5 SLR 125
      • [2019] 3 SLR 979
      • 540 BR 80 (Bankr SDNY 2015)

8. Remedies Sought

  1. Extension of moratorium

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Insolvency
  • Corporate Restructuring

11. Industries

  • Finance
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re Pacific Andes Resources Development LtdHigh CourtYes[2018] 5 SLR 125SingaporeCited to support the contention that listing on the Singapore stock exchange is sufficient for jurisdiction to be established in respect of a s 210(10) Companies Act moratorium.
Re IM Skaugen SE and other mattersHigh CourtYes[2019] 3 SLR 979SingaporeCited for the other requirements for the moratorium sought.
In re Berau Capital Resources Pte LtdBankruptcy Court for the Southern District of New YorkYes540 BR 80 (Bankr SDNY 2015)United StatesCited regarding the recognition of Singapore-based bankruptcy proceedings in New York.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore
Section 211B of the Companies ActSingapore
Section 211A(1) of the Companies ActSingapore
Section 211A(3) of the Companies ActSingapore
Section 351 of the Companies ActSingapore
Section 351(1)(d) of the Companies ActSingapore
Section 351(2A) of the Companies ActSingapore
Section 4 of the Companies ActSingapore
Section 210(1) of the Companies ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Moratorium
  • Scheme of arrangement
  • Substantial connection
  • Senior Secured Notes
  • Debt service account
  • Companies Act
  • Winding up

15.2 Keywords

  • Moratorium
  • Companies Act
  • Insolvency
  • Singapore
  • PT MNC Investama TBK
  • Standing
  • Substantial connection

16. Subjects

  • Insolvency
  • Moratorium
  • Company Law

17. Areas of Law

  • Insolvency Law
  • Company Law
  • Moratoria