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PT Modernland Realty Tbk has completed the restructuring of approximately $290 million in offshore notes through an innovative debt-for-land swap that transfers Indonesian land assets to a creditor-controlled entity. The transaction became effective on September 30, 2026, following sanction by the Singapore High Court on September 17, 2026, according to disclosures by the company to the Indonesia Stock Exchange. The notes were originally due in April 2027 but have now been extended to June 2028 as part of the scheme, with the company reporting approval from 97.76 percent of the claim value.
The scheme of arrangement received overwhelming support, with 98.1 percent of participating noteholders voting in favor, company filings show. This pre-packaged approach allowed for an efficient resolution without protracted litigation. PT Modernland Realty described the outcome as mutually beneficial for the company and its creditors, while noting that the process began with the scheme launch in mid-August 2026.
Under the restructuring, the developer will transfer land from projects including Jakarta Garden City, Modern Hill and Bekasi, valued at around Rp3.5 trillion, to a special purpose vehicle set up for the noteholders. The transfer is targeted for completion by December 30, 2026, subject to conditions including new financing arrangements, the company stated. In exchange, all obligations related to the notes, including accrued interest totaling nearly Rp5 trillion, will be cancelled.
This debt relief eliminates an annual interest burden of Rp300 billion, significantly boosting the company’s cash flow position going forward, according to its senior management. The post-restructuring debt-to-equity ratio is projected to fall to approximately 0.4 times, enhancing its financial flexibility. PT Modernland Realty’s Group CFO F. Bobby Heryunda said, “We convey the highest appreciation to the bondholders for their extraordinary trust and support. The near 100 percent approval rate shows that this innovative solution is well accepted as a mutually beneficial solution, and ensures the sustainability of the close relationship between the Company and the bondholders that has been running so far.”
Following the asset transfer, the company will retain a substantial landbank of at least 1,664 hectares with a value exceeding Rp11.8 trillion that is earmarked for future development. Heryunda noted that the transferred land was outside the firm’s near-term development pipeline and would not impact revenue projections. The move has been welcomed by shareholders as it supports the company’s long-term sustainability.
Legal advisors played key roles in navigating the cross-border elements of the deal. Kirkland & Ellis advised the key noteholders on the transaction while Baker McKenzie advised PT Modernland Realty on the successful restructuring. The Kirkland team included partners Wei-Yang Lim and Anthony Wijaya, the firm stated.
The restructuring exemplifies a growing use of asset-backed solutions in Indonesian corporate debt resolutions amid efforts to stabilize balance sheets after years of sector challenges. The company emphasized that the scheme arose from constructive dialogue with creditors. This outcome is expected to open doors for further collaboration with financial institutions.
