Bargains Are Hidden in Indonesia’s $44 Billion of Distressed Debt

Indonesia’s pile of pandemic-related corporate debt is offering some investors the chance to cherry-pick cheap assets before a government forbearance program runs out next year.

The two-year-old government plan gives creditors and debtors time to resolve billions of dollars worth of loans to companies including airline PT Garuda Indonesia to prevent wholesale bankruptcies from the Covid-induced slump. Banks are keen to reduce their exposure to the distressed loans — worth about $44 billion in total at the last count in February — before the program ends in March 2023, prompting debt specialists such as Värde Partners and Helios Capital to mine the data for bargains.

While Indonesia’s ...