PT Sri Rejeki Isman Tbk (SRIL), commonly known as Sritex, has officially been declared bankrupt after the Supreme Court rejected its appeal on Wednesday, December 18, 2024, marking a critical turning point for the textile giant.
The Supreme Court hearing, led by Justice Hamdi, confirmed the verdict by the Semarang Commercial Court on Monday, October 21, 2024, which had declared Sritex bankrupt.
The court deemed Sritex failed to fulfill its debt obligations to PT Indo Bharat Rayon (IBR), one of its creditors, as stipulated in the homologation agreement on Tuesday, January 25, 2022.
The decision also implicated three subsidiaries of Sritex − PT Sinar Pantja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya − as respondents in the case. Before its bankruptcy declaration, Sritex had already laid off 2,500 workers due to difficulties in securing raw materials.
Despite government approval for permanent raw material imports, operational challenges arose from the actions of court-appointed administrators and legal processes.
Iwan S. Lukminto, President Commissioner of Sritex, warned of further potential layoffs if the company could not resolve these issues promptly. The company’s bank accounts had been frozen, disrupting cash flow for import and export activities.
“We face a mismatch in priorities between the administrators and the management. The administrators focus on liquidation, while we aim to sustain operations,” Lukminto said on November 13, 2024.
According to the Financial Services Authority (OJK), Sritex owed a total of Rp14.64 trillion (US$899.6 million) as of September 2024. This includes Rp14.42 trillion in loans from 27 banks and additional debts to three multifinance companies.
Despite the mounting liabilities, OJK noted that the creditors’ financial reserves remained sufficient to mitigate the losses.
Legacy of a textile giant
Once a symbol of Indonesia’s industrial prowess and a key supplier to global markets, Sritex’s downfall highlights significant challenges in corporate governance and financial management.
The company’s bankruptcy not only impacts its workforce and stakeholders, but also serves as a cautionary tale for other large enterprises navigating complex financial landscapes.
