Trikomsel Oke's looming default will also weaken investors' confidence in debt paper issued by other Indonesian companies. Earlier in October, American financial services company Standard & Poor's warned that Indonesian companies' defaults are a serious threat over the next 18 months given their eroded balance sheets amid the country's economic slowdown and weak rupiah. Meanwhile, Indonesian credit rating agency Pemeringkat Efek Indonesia (Pefindo) cut Trikomsel Oke's corporate rating to 'BB+' (credit-watch with negative implication) from 'BBB' (stable outlook).

Financial turmoil at Trikomsel Oke is caused by the economic slowdown of Indonesia (GDP growth having fallen to the six-year low of 4.67 percent y/y in the second quarter of 2015). With Indonesians' curbed purchasing power, the company's sales and earnings weakened. This is exacerbated by sharp rupiah depreciation. So far this year, the rupiah has weakened 9.5 percent against the US dollar and 3.5 percent against the Singapore dollar.

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

Indonesian Rupiah versus Singapore Dollar:

| Source: Bank Indonesia

Trikomsel Oke appointed FTI Consulting as financial adviser and Ashurst LLP as legal adviser to obtain advice about sustaining operations toward the future.

The company's debt includes two debentures (a debt instrument not secured by physical assets or collateral) denominated in the Singapore dollar through its Singapore-based subsidiary: one bond was issued on 10 May 2013 (due on 10 May 2016), with an annual 5.25 percent coupon rate, collecting 115 million Singapore dollars. And the second is a 100 million Singapore dollar bond bearing a 7.875 percent coupon rate (due in June 2017). In total, the company currently has a debt of around USD $460 million. Alarmingly, about 80 percent of this total debt is due in the next two years. In a filing with the Singapore stock exchange, the company stated that it is "unlikely to be in a position to service interest and repay debts". However, the company will continue to service interest on key banking facilities in Indonesia in order to safeguard the continuation of operations.

In the first half of 2015, Trikomsel Oke recorded negative cash flow from operations of IDR 53.5 billion (approx. USD $4 million).