Garuda Indonesia Proposes Extension For Debt Restructuring
Debt-ridden flag carrier Garuda Indonesia has once again asked for an extension of time to complete its postponement of debt payment obligations (PKPU), citing a need to sort out remaining details with creditors.
Irfan Setiaputra, CEO of Garuda Indonesia, told the Central Jakarta Commercial Court it proposes to extend the deadline by 30 days starting from 20 May 2022 to verify claims and finalize negotiations with creditors, local media outlets report.
Setiaputra says the extension will provide greater opportunity for the airline and all creditors, including lessors, to reach a mutual agreement. There are still some commercial, administrative and legal aspects that have yet to be resolved before the current deadline, he adds.
This is the third extension Garuda Indonesia has asked for. The airline was first given time to 21 March, and again another extension of 60 days till 20 May.
Setiaputra asserts that this is the last extension request, as the airline does not want to be unfair to creditors who have reached an agreement with it already.
He says creditors have agreed to the extension, but the extension also requires the courts’ approval, local media outlets report.
Setiaputra says the airline’s passenger and cargo operations will continue to run normally during the debt restructuring, adding that Garuda Indonesia’s performance at the end of 2022’s first quarter has improved, thanks in part to a relaxation of COVID-related travel restrictions.
“The operation of the pilgrim flights from a number of major cities in Indonesia is a strong accelerator for our recovery, which we will seek to optimize,” he says.
Smart Aviation Asia Pacific previously reported that the Indonesian government’s plan aims to reduce Garuda Indonesia’s debt burden to US$3.69 billion from US$6.09 billion, by asking creditors – including aircraft lessors – to extinguish some debt or accept swapping debt for equity.
The government has also announced it will inject 7.5 trillion rupiah (US$522 million) of state capital into Garuda Indonesia, once the airline reaches a debt settlement with creditors.
Picture Source: Garuda Indonesia
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