An aircraft of Garuda Indonesia (Photo courtesy of the carrier) Jakarta (VNA) - Indonesia is finalising a financial bailout planworth 1 billion USD for the national flag carrier PT Garuda Indonesia to helpit avoid bankruptcy after the COVID-19 pandemic forced the airline to groundmost of its planes.
Deputy State-Owned Enterprises Minister of Indonesia KartikaWirjoatmodjo said the rescue plan includes a proposal to restructure thecarrier's 500 million USD of sukuk ("sharia compliant" bonds) duenext month and arrange new bridge loans of as much as 500 million USD to meetworking capital requirements for three to six months.
Garuda will table the sukuk proposal to investors on May 18that will include an option to extend the maturity of the securities by threeyears or a staggered repayment, Wirjoatmodjo said.
Last month, the carrier asked bondholders to begin talks withits financial adviser, citing an "extremely challenging environment forairlines" following the outbreak.
The government help in tiding over the financial crunchshould sooth investor concerns about Garuda's ability to survive the pandemicthat has forced airlines worldwide to seek state bailouts and emergencyfunding.
Garuda, in which Indonesia's government owns almost 61percent, has already cut employee salaries and renegotiated aircraft leaseagreements to tackle a slump in travel sparked by the pandemic.
Deputy Minister Wirjoatmodjo said Garuda remains a goodcompany with bright prospects, adding that its business will remain robustafter the outbreak ends.
Garuda's Chief Executive Officer Irfan Setiaputra said in aMarch interview the airline won't default on the debt and was in talks withseveral banks about refinancing.
The airlines has received three loan facilities fromstate-owned Bank Rakyat Indonesia (BRI) with a total value of 382 million USDto fund its working capital./.
Deputy State-Owned Enterprises Minister of Indonesia KartikaWirjoatmodjo said the rescue plan includes a proposal to restructure thecarrier's 500 million USD of sukuk ("sharia compliant" bonds) duenext month and arrange new bridge loans of as much as 500 million USD to meetworking capital requirements for three to six months.
Garuda will table the sukuk proposal to investors on May 18that will include an option to extend the maturity of the securities by threeyears or a staggered repayment, Wirjoatmodjo said.
Last month, the carrier asked bondholders to begin talks withits financial adviser, citing an "extremely challenging environment forairlines" following the outbreak.
The government help in tiding over the financial crunchshould sooth investor concerns about Garuda's ability to survive the pandemicthat has forced airlines worldwide to seek state bailouts and emergencyfunding.
Garuda, in which Indonesia's government owns almost 61percent, has already cut employee salaries and renegotiated aircraft leaseagreements to tackle a slump in travel sparked by the pandemic.
Deputy Minister Wirjoatmodjo said Garuda remains a goodcompany with bright prospects, adding that its business will remain robustafter the outbreak ends.
Garuda's Chief Executive Officer Irfan Setiaputra said in aMarch interview the airline won't default on the debt and was in talks withseveral banks about refinancing.
The airlines has received three loan facilities fromstate-owned Bank Rakyat Indonesia (BRI) with a total value of 382 million USDto fund its working capital./.
VNA
