Indonesian clothing firm PT Pan Brothers distress is fuelling broader concerns about the nation’s apparel sector, which has been particularly vulnerable to faltering global demand during the pandemic. Supplier to brands like Ralph Lauren, Prada and Adidas, PT Pan Brothers’ dollar bonds slid to record lows of about 36.7 cents on the dollar after it postponed a new global debt offering and had to extend its loan in US currency. As per a Bloomsberg report, the company and its subsidiaries need to repay or refinance $310 million of offshore debt this year and next, consisting of the loan and a $171 million bond that will mature in January 2022

Constituting over 80 per cent of sales, the company’s exports stagnated in the first nine months of last year as the pandemic shut retail stores. The firm’s net profit rose 0.4 per cent in that period to $19.2 million, the slowest pace in three years, according to its latest financial report. To solve refinancing issues, Pan Brothers plans to sell a global bond in the second quarter. It will provide a corporate guarantee for the new notes and also use its own and the units’ assets as collateral, according to the offering prospectus.

Founded in 1980, the company which is based near Jakarta, produces clothes mainly for export. It said at the December meeting that it had 25 factories across three provinces in Indonesia that make 117 million clothing articles annually.