New Garuda rescue plan seeks $6 billion debt cut

The State-Owned Enterprises (SOEs) Ministry has announced a new plan to save Garuda Indonesia, as the debt-laden national air carrier teeters on the edge of bankruptcy. The proposal, unveiled by Deputy SOEs Minister Kartika Wirjoatmodjo on Tuesday, entails pressing creditors – including aircraft lessors, banks and business partners – to accept either a haircut or a debt-for-equity swap. Garuda would issue zero coupon bonds to repay state-owned companies Pertamina, Airnav, Gapura, Bank Mandiri, BRI and BNI and would conduct a debt-for-equity swap to repay state-owned airport operators AP I and AP II. The two options are also on the table for aircraft lessors, which account for two thirds of the air carrier’s total US$9.8 billion of debt. Kartika said the plan was expected to cut Garuda’s debt by US$6.09 billion to $3.69 billion, a 62 percent reduction. “If there is no debt reduction on its balance sheet, [Garuda] will not be able to survive,” Kartika said during a hearing at the House of Representatives. Garuda shareholders were previously weighing several options to save the company, including bailing it out, restructuring its debt or establishing a new national air carrier. Reporter : Vincent Fabian Thomas Video editor : Mira Adinia Producer : Abdur Rahim ----------------------- This article was published in thejakartapost.com with the title "New Garuda rescue plan seeks $6 billion debt cut ". Click to read: https://www.thejakartapost.com/business/2021/11/11/new-garuda-rescue-plan-seeks-6-billion-debt-cut.html . Download The Jakarta Post app for easier and faster news access: Android: http://bit.ly/tjp-android iOS: http://bit.ly/tjp-ios LIKE, FOLLOW, SUBSCRIBE to The Jakarta Post's social media accounts for more interesting content! Facebook: https://www.facebook.com/jakpost Twitter: https://twitter.com/jakpost Instagram: https://www.instagram.com/jakpostimages Youtube: /TheJakartaPostDigital

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