Garuda Indonesia’s Debt Restructuring Delayed
Monday, 09 October, 2006 | 20:38 WIBTempo Interactive
, Jakarta: The restructuring of PT Garuda Indonesia’s debt amounting to US$794 million, or Rp7.3 trillion, to several domestic and foreign creditors has been delayed.
At first, Garuda presented debt restructuring schemes in September, but because the government had not decided which scheme should be used, debt restructuring will almost certainly to be delayed until the beginning of November.
“The delay is also because of the fasting month and the Eid holidays, the government is concentrating more on these,” Alex Maneklaran, Finance Director of Garuda Indonesia, told Tempo last weekend.
Garuda itself has proposed several schemes to settle its debts to creditors.
The debt restructuring is an important part of the effort to improve the company.
Nevertheless, Alex was not willing to explain about the schemes.
What is certain is that the schemes will support Garuda’s performance in order to meet its profit targets of Rp65 billion in 2007 and Rp444 billion in 2008.
Garuda has also asked the government to complete the Government Regulation on state co-financing so that fund supply to Garuda of Rp500 billion can be disbursed.
“At the least, the schemes support Garuda to reach a point of equilibrium in 2007,” said Alex.
At the beginning of September, Garuda submitted two schemes to the Garuda Indonesia debt restructuring team set up by the government and led by Sahala Lumban Gaol, Deputy Coordinating Minister for the Economy from the Macro Economy and Finance Division.
This team will present the schemes to the State Enterprises Ministry in October.
The debt restructuring proposal, Gaol said, was addressed to all creditors because all of them want the same treatment.
“All creditors have only welcomed the options. They haven’t known our requests,” he said.
Currently Garuda’s highest debt is to European Credit Agency amounting to US$497 million.
The remaining debts to creditors: floating rate notes holders US$130.6 million; Export Development of Canada US$12.1 million, BNI US$11 million, Bank Mandiri syndicate US$2.5 million and in the form of mandatory convertible bond US$136.8 million.