Creditors of troubled Indonesian flag carrier Garuda Indonesia are seeking claims of about 198 trillion rupiah ($13.9 billion) as part of the airline’s debt restructuring, Bloomberg News said, citing a court-appointed case manager. Administrators said they had received claims from more than 470 creditors as of the Jan. 5 deadline. The claims will be inspected and verified by January 19, they added. State-controlled Garuda is in the midst of a debt restructuring led by a Jakarta court after the airline came under pressure due to sluggish travel during the Covid-19 pandemic. It said it would restructure its finances, fleet and flights…
Creditors of troubled Indonesian flag carrier Garuda Indonesia are seeking about 198 trillion rupiah ($13.9 billion) in claims as part of the airline’s debt restructuring, Bloomberg News Court-appointed administrators were cited in the case.
Administrators said they had received claims from more than 470 creditors as of the Jan. 5 deadline. The claims will be inspected and verified by January 19, they added.
State-controlled Garuda is in the midst of a debt restructuring led by a Jakarta court after the airline came under pressure due to sluggish travel during the Covid-19 pandemic. It said it would restructure its finances, fleet and flight network in response to the crisis.
Persistent negative cash flow during the Covid-19 pandemic
In the restructuring, Garuda has taken steps to buy more time to repay what it says is an estimated $9.8 billion in outstanding debt. The airline said it had been operating with negative cash flow throughout the Covid-19 pandemic.
Among the debt is the $500 million Islamic bond, or sukuk, that the airline recently defaulted on.
An official from the country’s state-owned enterprise ministry said last November that Garuda was “technically bankrupt” and planned to reduce its liabilities by more than 60% through a restructuring process to overcome the pandemic. Under the proposal, the company seeks to reduce its debt to $3.7 billion from $9.8 billion.
Garuda’s chief financial officer, Prasetio, told the agency that the higher figure provided by creditors was partly due to some lessors filing Garuda’s gross and future liabilities and not discounting or calculating the present value of those liabilities, adding that the carrier would insist Its $9.8. Billions of dollars in debt.
