Established in 2001, PT Tuban Petrochemical Industries (TubanPetro) was a part of debt restructuring of PT. Tirtamas Majutama and its affiliates to the Government of Indonesia (GOI)/ Indonesia Bank Restructuring Agency (IBRA). It was then hold under a dual partnership of the Government and PT. Silakencana Tirtalestari, representing PT. Tirtamas Majutama in 70:30.
As the restructuring proceeded, PT. Tirtamas Majutama holdings in PT. Trans Pacific Petrochemical Indonesia (TPPI) and PT. Polytama Propindo (Polytama) were transferred to TubanPetro in February 2004; while on the other side TubanPetro issued Multi-Year-Bond (MYB) to IBRA. Three years later, PT. Petro Oxo Nusantara (PON) was also transferred to TubanPetro under the same circumstances.

On December 2011, several efforts were made to meet an expedited MYB payment. Master Restructuring Agreement (MRA) as one of those was signed by TPPI, Mr. Honggo Wendratno (the former owner of TPPI, Polytama and PON), PT. Perusahaan Pengelola Aset (Persero) (PPA), TubanPetro, Pertamina and SKK Migas. Unfortunately, the determined Conditions Precedent was not met.

On June in the following year (2012) an amendment to MRA was signed to extend the fulfillment of Conditions Precedent up to 60 days. This was the second attempt Mr. Wendratno missed.

On August 27, 2012, a loan of Rp 734.000.000.000,00 of the seventh MYB payment – (Pembayaran Seri VII) was not achieved. It led PPA to issue a Default Notice to TubanPetro on September 26, 2012 declaring that MYB outstanding balance becomes due and to be paid immediately.

On that account, PT. PPA held the authority of 30 per cent share of TubanPetro which was previously owned by PT. Silakencana Tirtalestari and TubanPetro’s share in subsidiaries as well (the collateral of MYB). Since then PPA had an absolute control to TubanPetro Group. In January 2013, PPA installed the new management of TubanPetro Group without any representative of PT. Silakencana Tirtalestari.

A month later, Polytama restarted production after its shutdown in 2010. Polytama, at the moment, is having loan restructuring with the creditors.

In May, Supreme Court ratified TPPI’s composition plan that had been settled in District Court on December 2012. TPPI, in the next six months, restarted production after its shutdown in December 2011. It is currently in the final stage of the composition plan implementation.