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Corporate Restructuring for Strategic Governance

corporate restructuring

Cited from Kontan.co.id (February 4, 2025), PT Multi Medika Internasional Tbk (MMIX) recently held an Extraordinary General Meeting of Shareholders (Rapat Umum Pemegang Saham Luar Biasa/RUPSLB) to implement key changes in its corporate structure. The company officially appointed new members to its Board of Directors and Board of Commissioners, marking a significant move to strengthen corporate governance and operational efficiency.

During the RUPSLB, MMIX appointed a new key figure to assume the role of President Commissioner. The changes reflect MMIX’s commitment to restructuring its leadership to align with strategic business goals and market demands.

What is Corporate Restructuring

Corporate restructuring is the process of reorganizing a company’s structure, operations, or finances to enhance efficiency, ensure sustainability, and adapt to market changes. This can include mergers, acquisitions, divestments, debt adjustments, or workforce reorganization.

Under Law Number 40 Year 2007 concerning Limited Liability Companies (Undang-undang Perseroan Terbatas), restructuring may be required in the following cases:

  1. Change (Amendments) to the Articles of Association (Anggaran Dasar): Adjusting company objectives, ownership structures, or operational guidelines to align with business needs and regulatory requirements.
  2. Change in the company capital and shares: Increasing the invested capital structure, issuing new shares, reducing capital, or restructuring shareholder compositions to enhance financial flexibility.
  3. Change in the Board of Director (BoD) and Board of Commissioner (BoC): Appointing new leadership, extending board tenures, or restructuring governance to improve decision-making and corporate oversight.
  4. Major Corporate Actions, including:
    1. Merger: Combining two or more companies to achieve operational synergies and market expansion.
    2. Consolidation: Uniting businesses into a single legal entity to streamline operations and enhance financial performance.
    3. Acquisition: Gaining control over another company through share purchases or asset transfers to strengthen market position.
    4. Separation (Spin Off): Splitting business units into independent entities to improve focus, efficiency, and shareholder value.

Why Corporate Restructuring Matters

Companies perform restructuring to:
  1. Innovation and Efficiency Improvement: Modern restructuring integrates innovation, digital transformation, and operational excellence.
  2. Increased Investor Confidence: A well-executed restructuring strategy can boost investor trust, leading to increased financial backing.
  3. Competitive Edge: Companies that continuously realign operations remain more agile and competitive in their industries.

Key Areas of Corporate Restructuring

To fully optimize business operations, restructuring efforts should focus on:
  1. Corporate Governance: Improving decision-making processes by appointing the Board of Directors and Board of Commissioners.
  2. Financial Restructuring: Adjusting capital structures, consolidating debts, or securing new sources of funding.
  3. Operational Efficiency Improvements: Streamlining supply chains, adopting digital tools, and optimizing human capital for increased productivity.

Key Steps in Corporate Restructuring

Corporate restructuring requires careful planning and execution, following these key steps:
  1. Approval in the General Meeting of Shareholders / GMS (Rapat Umum Pemegang Saham / RUPS): Any restructuring must be approved in the General Meeting of Shareholders (RUPS). It can be discussed in either the Annual GMS (RUPS Tahunan) or an Extraordinary GMS (RUPS Luar Biasa) for urgent matters.
  2. Notification to Stakeholders: Key stakeholders, including creditors and employees, must be notified. They have 14 to 60 days to raise objections, depending on the restructuring type.
  3. Regulatory Approvals: Some restructurings, like mergers or stock buybacks, need OJK (Financial Services Authority) approval. Other regulatory bodies apply based on industry and business activities.
  4. Legal Documentation and Amendments: Changes must be updated in the Articles of Association and reported to the Ministry of Law.
  5. Ongoing Compliance and Monitoring: Some industries that perform specific business activities need extra regulatory oversight, such as:
    • Ministry of Health for Hospitals or healthcare activities
    • Ministry of Public Works (Kementerian Pekerjaan Umum dan Perumahan Rakyat) for Construction activities
    • OJK for Financial activities

Let Us Assist Your Corporate Restructuring Process

Corporate restructuring is a strategic necessity rather than just a response to financial distress. Businesses that adopt a proactive, innovative, and adaptive approach to restructuring can secure long-term success. Whether through leadership changes, business model innovation, or financial restructuring, companies must ensure that every step aligns with future growth and sustainability.

Contact us today to assist you with corporate restructuring for your company!

Let us help you restructure your corporation.

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