Giant Sritex bankrupt, 20,000 workers at risk of layoffs & no severance pay

Jakarta, CNBC Indonesia – The fate of around 20,000 workers in Sritex group factories now hangs in the balance. The reason is, they are at risk of losing their jobs, aka being laid off and they may not receive severance pay.

As is known, the Semarang Niaga District Court (PN) declared the textile company PT Sri Rejeki Isman Tbk (SRIL) or Sritex bankrupt, cited in the decision with case number 2/Pdt.Sus – Homologasi/2024/PN Niaga Smg.

It was stated that Sritex, PT Sinar Pantja Djaja, PT Bitratex Industries, and PT Primayudha Mandirijaya had not fulfilled their payment obligations to PT Indo Bharat Rayon, as the applicant, based on the Homologation Decision dated January 25, 2022.

“This decision to cut will affect approximately 20,000 remaining employees in the Sritex group. They will lose their jobs and may not receive severance pay,” the President of the Confederation of Indonesian Workers’ Unions (KSPN) Ristadi told CNBC Indonesia, Thursday (24). /10/2024).

“This is because, based on information, you can check again, Sritex’s total debt is around IDR 25 trillion. At the same time, their total asset value is around IDR 15 trillion. So even if all of this is sold it will not cover that debt If “In such circumstances, there is a high chance that employees will lose their jobs and not receive severance pay, ” explained Ristadi.

For your information, before being declared bankrupt, Sritex had sunk because it was hit with ever-increasing debt. As of September 2022, SRIL’s total liabilities were recorded at US$ 1.6 billion or equivalent to IDR 24.66 trillion (exchange rate = Rp. 15,500 / US$). This amount is subject to interest-bearing debt, such as bank loans and bonds. If it goes under big due to being hit by debt, Sritex will be just a name.

“From information from friends of KSPN there, right now the company is trying to file an appeal, there will definitely be an appeal, yes. Until the bankruptcy decision is postponed,” said Ristadi.

“We hope it will be cancelled. It is a pity that 20,000 workers will lose their jobs without severance pay,” he concluded.

(dce/dce)