IFLR 1000
The Guide to the World's Leading Financial Law Firms

The Indonesian capital markets experienced an all-time high at the end of 2009, prompting the authorities into action with many implications for 2010. "The growing power of Indonesian investors and the middle class, married with the increased potential for public offerings on the stock exchange led to more activities on the stock market and a subsequent growth in the economy," says a partner.

One resulting endeavour in May 2010 was to issue a new Negative Investment List in order to clarify which industries are closed, and which are closed but open to limited participation by investors. The Negative Investment List contains provisions over which industry sectors in Indonesia foreign entities may invest in and how they may do it.

However, there is concern that the 2010 Negative Investment List only refers to rights issues, whereas an increase of foreign investor shareholding can also be done through a tender offer. It is believed that the 2010 Negative Investment List will also be applicable if foreign investors increase their shareholding so that they are considered controlling shareholders.

A few notable applications include a foreign investor selling its excess shares to a domestic investor or alternatively, a foreign investor selling its excess shares through a public offering conducted by the company (in which the investor owns shares) in its domestic capital market. If the company, as mentioned above, buys the excess shares owned by the foreign investor, it can treat them as treasury stocks.

When the parliament and the government of Indonesia passed the Anti-Monopoly Law in 2009 it was not anticipated that the implementation of the regulation would take years. But in July 2010 the government finally passed the implementing regulation for Articles 28 and 29. The former (Article 28) prohibits M&A that may result in a monopoly, while the latter requires post-notification for M&A of a certain size.

ABNR is highly regarded for its M&A work on high-value transactions, as one client says: "They're tailored to address our business and business strategic requirements and provide innovative solutions to complex problems." The firm acted as local counsel to the joint lead managers and book-runners on the acquisition of a 40% stake in Indonesian coal company Delta Makmur Mandiri last year.

Foreign counsel Theodoor Bakker is renowned for his expertise in banking and finance and is also a prominent figure on the corporate M&A scene. Another foreign counsel, Oene Marseille, has a growing reputation in the market and "produces some high quality work", says a peer. Emir Nurmansyah has a sterling reputation in banking and finance and is also held in high esteem for his corporate work, particularly corporate restructuring. "I think Emir is very good," says one client.

Assegaf Hamzah & Partners (AHP) retains its tier one ranking under the leadership of Fikri Assegaf. A client says: "Fikri is the main contact person I deal with and is deeply knowledgeable and exceptionally capable as a legal professional." A rival partner went further, saying: "Fikri's problem solving skills are extraordinary."

Showing the team is not a one man band, Bono Daru Adji is also praised as "a very experienced lawyer with excellent communication skills," according to one client, adding: "the team at AHP is very creative in solving problems." Another client adds: "We have a very close relationship to AHP and they are our go-to firm for work in Indonesia. Therefore almost everything we do in Indonesia we do in conjunction with them, from IPOs and bond restructurings to compliance investigations and M&A work."

Last year the capital markets team represented the standby buyers and global book-runners in an $11 billion rights issue by Bank Mandiri. This was the biggest rights issue of 2010 in Indonesia after Bank Negara Indonesia and reinforced AHP's leading role in the government privatisation program.

The team also represented PT Indosat, one of Indonesia's largest telecommunications companies, on the issue of $650 million, 7.375% senior notes, one of the largest debt issuances in 2010.

The M&A team advised chemicals producer PT Chandra Asri on its merger with PT Tri Polyta Indonesia. As Indonesia's biggest producer of polypropylene resins, this created Indonesia's largest publicly listed petrochemicals company valued at over $1.2 billion.

Another highlight was representing Jakarta-based financial services provider Recapital Group in connection with its acquisition of a 90% stake in PT Berau Coal, the fifth largest coal producer in Indonesia. This transaction ended as one of the year's biggest deals with a value of almost $1.5 billion.

"Direct involvement of experienced partners who bring commercial and practical solutions to complex matters", is one client's view of the qualities of Bahar & Partners, while another praises the firm for "keeping small but focused transaction teams".

Bahar & Partners is a renowned powerhouse in the capital markets in Indonesia under founding partner Wahyuni Bahar. A rival partner comments: "Bahar is an expert in capital markets, just a quality lawyer." Under his stewardship the firm is constantly involved in high profile transactions.

One example saw the team recently appointed as legal counsel to local shipping company PT Rig Tenders Indonesia, an indirect subsidiary of one of the major marine-related services' companies in Malaysia. PT Rig Tenders Indonesia mainly offers marine vessels' transportation services to the energy sector involving coal, oil and gas.

Another highlight for the capital markets team was advising Trust Energy Resources, an affiliate of Tata Power. Trust Energy Resources is India's largest private power utility group in terms of its investment in an Indonesian public listed company. The firm advised on corporate matters and capital markets compliance and regulatory matters.

The M&A team also advised Tata Motors, the largest automobile manufacturer company for commercial vehicles and passenger cars in India.

The DNC Advocates At Work capital markets and M&A teams have been drawing great reviews with clients: "Their level of knowledge and expertise is good, their innovative ideas are timely and practical."

Another client commented: "They are keen to understand and appreciate the client's requirements, on site or off site and have a decent exposure in dealing with international clients and awareness of international affairs."

Also receiving high praise is practitioner Arie Armand who is "quite experienced, knowledgeable and practical in his own level", according to one client.

The past year has seen the firm advising Merrill Lynch in the matrix for the Code of Conduct to offer offshore capital market and banking products in Indonesia.

"Hadiputranto Hadinoto & Partners' (HHP) capital markets practice has been widely recognised for many years as the top capital markets practice in Indonesia," says a rival partner. The team is highly regarded in managing a wide range of capital markets/securities related projects, IPOs and diverse contractual matters while "having the ability to make their clients feel like they are their only client", comments a long-standing client.

The departure of highly regarded Harun Reksodiputro would leave most teams with a gaping hole to fill, however most in the market believe that HHP has the depth to cope. "Their advice is more inside how markets and clients and regulators work than other advisors," says a client.

The team is led by Sri Indrastuti Hadiputranto, considered to be "one of the pillars and a dean of Indonesian capital markets", according to a rival partner. Other notable lawyers include Mita Djajadiredja, described as "very good and knowledgeable". There is also Mark Innis, the "the lawyer firms love seeing on the other side with his no nonsense execution skills", according to one rival.

The past year has seen HHP advising Recapital Group and Bakrie Group in the acquisition of 75% of PT Berau Energy (Berau) shares from Recapital Group and 25% of PT Bumi Resources (Bumi) from Bakrie Group by Vallar. The combination of Berau and Bumi, valued at $3.03 billion would constitute Indonesia's largest coal company by production and reserves and will also be the first Indonesian controlled company to be listed on the LSE.

Another notable highlight was advising CVC Asia Pacific (Singapore) through its wholly owned subsidiary, on the acquisition of 98% of the shares in PT Matahari Department Store - one of the largest retail department stores in Indonesia. Given the Indonesian capital market regulations, CVC had to acquire a majority share in the target company undertaking a $774 million mandatory tender offer for the remaining 2% shares.

Hendra Soenardi "might not be as big as other internationally affiliated law firms but they pack quite a punch with their quality", says a rival partner. The firm's handling of complex M&A, acquisition financing and refinancing is highly regarded by peers as "comprehensive, thorough, and professional."

The two founding partners, Eddy Hendra and Soenardi Pardi, have "a strong reputation in the market" according to one partner, especially the former having previously been based in Singapore at an international law firm. "His work in cross-border M&A transactions is fantastic", says a rival partner.

Keeping pace with the ever-expanding cross border work in Indonesia, the firm hired Kyle Hollingsworth as foreign counsel from the Singapore Office of Latham & Watkins in January 2011.

One highlight saw the team act on a $65 million acquisition by PT Alam Tri Abadi of a 10% interest in coal mining company PT Bhakti Energi Persada from Global Star International.

Another notable highlight was advising PT Nugraha Eka Kencana on its acquisition from PT Swakarya Sinarmulia of a 40% interest in PT Mitra Pinasthika Mustika.

As an affiliate of UK firm Herbert Smith, Hiswara Bunjamin & Tandjung (HBT) possesses a team filled with quality and depth which can draw upon international experience. "Clients go to Hiswara Bunjamin & Tandjung for their dedication as they will find a solution," says a rival partner.

Leading the team is partner Tjahjadi Bunjamin, praised by peers as a "leading practitioner that takes charge of the team". Another highly regarded partner is Iril Hiswara, described as "very knowledgeable and fundamentally sound".

One of the highlights for the team this year was advising Cargill on its acquisition of a majority shareholding in Indonesian sorbitol, sweetener and starch producer, PT Sorini Agro Asia Corporindo.

Peers and clients believe HBT stands out from other law firms because of the two highly regarded foreign counsels in David Dawborn and Brian Scott. "David Dawborn, his ability as a legal professional and particularly as he is a foreign legal counsel is very good. His understanding about Indonesian law and its intricacies are very helpful in assessing current situation and the anticipated risks," comments a client.

"I certainly think Brian Scott takes a very commercial approach and advice is practical and useful," says another, "if it's a large M&A type transaction, I would go with Hiswara, part of it is because Brian Scott works closely with London and Singapore, he knows how UK entities work with his international experience."

Another notable transaction was advising Banpu, Thailand's largest coal miner on the US, UK, Singapore and Indonesian law aspects of a block trade on the Indonesian stock exchange. This transaction contained a $400 million 8.7% stake in its listed Indonesian subsidiary, PT Indo Tambangraya Megah (ITMG).

Hutabarat Halim & Rekan maintains its positions in tier three of both the capital markets and M&A tables this year. Established in 1995 the firm has been growing steadily ever since.

In the M&A area, department head Nini Halim led a team advising the Lee Cooper Group on its sale of its Indonesian business to FGIL. Halim also led as the firm acted alongside Debevoise & Plimpton in assisting Geoprolog Intiwijaya and Weltekindo Nusantara over the proposed acquisition of the Geoservices Group.

Halim also acted alongside capital markets head and fellow name partner Pheo Hutabarat advising the MNC Group in regard to the establishment of a new joint venture with Japanese corporate Rakuten. The project is related to web hosting and management consultancy in the field of online retail.

The firm also has foreign law experience in its ranks in the form of counsel Peter Fanning. Australian qualified, Fanning advises on corporate matters specifically foreign investment and natural resources.

On the capital markets front, Hutabarat acted for key client Indomobil Sukses Internasional last year as it completed a debt for equity swap transaction as part of the wider transfer of a loan.

"Very commercially minded and innovative, prepared to look at things from a different angle," comments one client of the firm. The ability to continuously implement current developments of laws and regulations, especially in the capital markets, is often praised. One rival law firm comments: "I think LGS is the dean of capital markets."

The firm has been active in advising on several acquisition transactions that are still on-going, among them advising a mining services company on the proposed acquisition of a 30% stake in group of coal mining companies in Sumatera and South Kalimantan.

Other capital markets transactions include advising a company in the acquisition of a group of shipping companies in Indonesia and Singapore, which involved the rights issue of the target company and renouncement of the seller's entitlement to subscribe for shares to be issued in the rights issue.

Another highlight was advising PT Recapital Securities as the standby buyer in the subscription of shares in connection with the rights issue of PT Bank Eksekutif International worth Rp512 billion ($60 million)

In M&A the team advised PT Recapital Advisors as the buyer in the acquisition of PT Bank Eksekutif for $40 million. This acquisition involved the structure of rights issues to the bank and renouncement of shareholders' entitlement to PT Recapital Securities

Makarim & Taira S has a "deep understanding of our business and provides quality service and advice", says a client, who also praises the firm for its "commitment to keeping a great working relationship". Another client notes: "I use this Makarim & Taira S because I see them as being very strong negotiators."

The highlight for the past year saw the firm represent Sara Lee in the huge acquisition of its business in Indonesia by Unilever. The acquisition is part of the global acquisition of Sara Lee's Body Care division by the Unilever group in approximately 40 countries. The firm committed a large team with a very involved role, advising Sara Lee on a wide range of Indonesian laws, including capital markets regulations and transaction structure.

Another highlight for the firm was acting for Sumitomo and GDF Suez in the acquisition of an investment by Supreme Energy's geothermal energy business in Indonesia. The team performed due diligence on Supreme Energy and also provided legal advice for the completion of the transaction.

"Makes & Partners are very knowledgeable in the area of capital market in Indonesia and they always provide the best possible solution," a satisfied client comments. Capital markets remain a focal point for this practice and clients "prefer Makes because of their expertise and willingness to provide solutions that really benefits us", says one.

Leading the team is Yozua Makes along with senior partner Iwan Setiawan, both are highly regarded and appreciated by clients. "We always deal with Makes because of Yozua Makes and Iwan Setiawan, both are very knowledgeable and professional."

The team for the past year has been busy advising an Indonesian state-owned company that is not only the largest steel producer in Indonesia but also one of the largest steel producers in Southeast Asia on the global offering of up to three billion of the company's shares. The value of this deal is approximately Rp2.7 trillion ($315 million).

As the securities were also offered outside of Indonesia, various foreign laws and regulations were also required to be taken into consideration.

The firm also served as legal counsel of Bowsprit Capital as manager of First Real Estate Investment Trust in relation to the acquisition of Mochtar Riady Comprehensive Cancer Centre Indonesia (MRCCC). This matter required completing the master lease of MRCCC and the acquisition of Siloam Hospitals Lippo Cikarang Indonesia.

"Melli Darsa & Co is the 'go-to-firm' for capital markets and securities", says one client. For the past year the capital markets team has advised on numerous high profile debt and equity offerings or private placements and has constantly proved it is "second to none in capital markets", according to one rival partner.

Lead partner Melli Darsa is labelled by fellow peers as "the pillar for capital markets in Indonesia" and she is ably supported by Sugianto Osman. "He's a good operator with strong all around knowledge," comments one rival partner.

The firm is currently representing the largest Indonesian oil company, state owned PT Pertamina (Persero) on its conversion to a "non listed public company". As part of the reformation in Indonesia, the Government is trying to make the company more transparent to the public.

Another highlight saw the team advise PT Indofood CBP Sukses Makmur (ICBP) on its IPO, noted by the Director of the Indonesian Stock Exchange as the biggest capitalisation on the exchange last year.

The firm also advised on the merger of PT Bank OCBC NISP (OCBC NISP) and PT Bank OCBC Indonesia (OCBC). The merger will take advantage of OCBC NISP's strength in the consumer and commercial segments and OCBC's focus on foreign multinational corporates. This complex deal requires not only the approvals of the Indonesian authority, particularly in the case of OCBC NISP as a publicly listed bank, but also approval from the Monetary Authority of Singapore.

"MKK works with foreign and domestic investors in developing and implementing investment strategies in virtually all areas of the commercial economy... and their advice is always unique and outside the box," says a client.

The capital markets team had a busy year and in one deal advised the underwriter for Berlian Laju Tanker's $5 billion rights issue. The team also conducted due diligence of Sri Trang, a rubber processing company, for their listing on the Singapore Stock Exchange.

MKK is noted for its industry knowledge in the mining sector, and recently advised Medco Energi as a bidder for BHP Billiton's Kalimantan coal project. Other standout transactions included acting for a consortium of investors led by Nippon Steel as a bidder for Indonesia's biggest steel manufacturer, Krakatau Steel.

The firm also renders advice on alternatives to foreign direct investment, such as the establishment of representative offices and technical assistance arrangements on licenses, franchise, toll manufacturing and distribution arrangements.

Some highlights this year were providing due diligence on Indonesian business group Mayapada and refrigerator company Asiatech, as part of their global sale by the Japanese company Iwata.

Soemadipradja & Taher "has a team that can deliver quality and market-relevant advice", says one client. With a strong reputation in corporate work the firm has been "one of the most active firms in Indonesia M&A", according to a rival partner.

The firm advised BHP Billiton (BHPB) in relation to a strategic review of the Maruwai Coal Project, which includes seven contracted companies and combined resources of 774 million tonnes of coal. Following the review, BHPB entered into binding agreements to create a new joint venture with a subsidiary, which acquired 25% interest in the joint venture. The deal required extensive due diligence of the seven contracted companies as well as drawing up the transaction documents.

Another highlight was advising Vallar on the $3 billion acquisition in 75% of PT Berau Coal Energy and 25% of PT Bumi Resources through its subsidiary company Vallar Investments UK.

The representation includes advising on all aspects of the acquisition procedure, including deal structure and the transaction documentation, capital markets rules and the mandatory tender offer. Other matters included the preparation of the prospectus in relation to the application a listing on the LSE.

SSEK "are a very professionally run firm, work product is quite clear and high professional standards, very knowledgeable in their understanding of Indonesian law", comments a client. The firm has built a solid reputation and clients have taken note: "[SSEK] are most likely the only firm to be able to pull off the complex structures we look for in a successful conclusion to an acquisition," says one.

Darrell Johnson is a highly commended "top drawer" foreign counsel, say peers, and his work this year included leading the team in advising Toyota in a joint venture company with PT Astra Otoparts to acquire the existing compressor production business from PT Denso Indonesia.

The M&A team advised GE Capital last year as it divested several financial holdings in Indonesia through various projects. These projects include the sale of GE Capital Banking shares in PT GE Finance Indonesia. SSEK worked extensively with Bank Indonesia, the Ministry of Finance and GE's international counsel throughout the complex transaction to complete the sale

A major asset to the M&A team is foreign counsel Michael Carl. "Michael displays a deep knowledge of Indonesian law. He identifies the key issues and is able to explain them clearly and yet propose innovative suggestions," comments a client. Another client offered further praise: "Michael is very good at explaining things in detail for example the inconsistency in certain legislations."