Debt Assumption Agreement Template for Indonesia

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Key Requirements PROMPT example:

Debt Assumption Agreement

"Need a Debt Assumption Agreement under Indonesian law where ABC Manufacturing Subsidiary (Original Debtor) will transfer its existing loan of IDR 5 billion to its parent company ABC Manufacturing Holdings (Assuming Party), with Bank Central Indonesia remaining as Creditor."

Document background
The Debt Assumption Agreement is a crucial document in Indonesian corporate and financial transactions, commonly used in business restructuring, mergers and acquisitions, or group company reorganizations. It enables a new party to take over existing debt obligations, providing flexibility in corporate debt management while ensuring creditor interests are protected. The agreement must comply with Indonesian Civil Code requirements and may require additional regulatory approvals depending on the parties involved and the nature of the debt. The document typically includes detailed provisions about the debt being assumed, payment terms, security arrangements, and the respective rights and obligations of all parties. It's particularly important in scenarios where companies are looking to restructure their debt obligations or when a stronger entity wishes to assume the debt of a weaker one to provide better security to the creditor.
Suggested Sections

1. Parties: Identifies the Original Debtor, the Assuming Party (New Debtor), and the Creditor

2. Background: Describes the existing debt arrangement, the intention to transfer the debt obligations, and the basis for the assumption

3. Definitions: Defines key terms used throughout the agreement, including 'Existing Debt', 'Assumption Date', and other relevant terms

4. Debt Assumption: Core provision detailing the assumption of debt, including the amount, terms, and effective date of the assumption

5. Representations and Warranties: Statements of fact and assurances from all parties regarding their capacity, authority, and the debt being assumed

6. Rights and Obligations: Details the ongoing rights and obligations of each party following the assumption

7. Payment Terms: Specifies how and when payments will be made by the Assuming Party

8. Release of Original Debtor: Terms regarding the release of the Original Debtor from their obligations

9. Events of Default: Defines circumstances constituting default and consequences thereof

10. Governing Law and Jurisdiction: Specifies Indonesian law as governing law and determines jurisdiction for disputes

11. Notices: Details how formal communications between parties should be made

12. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments

Optional Sections

1. Security Arrangements: Include when the assumption requires new security or transfer of existing security arrangements

2. Regulatory Compliance: Include when the transaction requires specific regulatory approvals or compliance measures

3. Tax Provisions: Include when specific tax arrangements or allocations need to be addressed

4. Original Debtor Guarantees: Include when the Original Debtor will provide guarantees for the Assuming Party's performance

5. Currency Provisions: Include when the debt is denominated in foreign currency or involves cross-border payments

6. Step-In Rights: Include when creditor requires right to step in under specific circumstances

7. Conditions Precedent: Include when the assumption is subject to certain conditions being met before becoming effective

Suggested Schedules

1. Schedule 1 - Details of Existing Debt: Comprehensive details of the debt being assumed, including amount, interest rate, and payment history

2. Schedule 2 - Payment Schedule: Detailed schedule of payments to be made by the Assuming Party

3. Schedule 3 - Existing Security Documents: List and copies of any existing security documents related to the debt

4. Schedule 4 - Form of Notice to Third Parties: Template for notifying relevant third parties of the debt assumption

5. Schedule 5 - Required Consents and Approvals: List of all required regulatory or third-party consents and their status

6. Appendix A - Original Debt Agreement: Copy of the original debt agreement being assumed

7. Appendix B - Corporate Authorizations: Copies of corporate authorizations from all parties approving the assumption

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Relevant Industries

Banking and Financial Services

Real Estate and Property Development

Infrastructure and Construction

Manufacturing

Mining and Natural Resources

Energy

Telecommunications

Retail and Consumer Goods

Healthcare

Transportation and Logistics

Relevant Teams

Legal

Finance

Treasury

Corporate Finance

Risk Management

Compliance

Corporate Secretarial

Credit Administration

Business Development

Mergers & Acquisitions

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Secretary

Treasury Manager

Financial Controller

Risk Manager

Compliance Officer

Managing Director

Corporate Finance Manager

Restructuring Officer

Credit Manager

Legal Director

Transaction Manager

Business Development Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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