News
Indonesian government seeks to cut Garuda debt by almost 70%
November 16th 2021
The Indonesian Government is pushing Garuda Indonesia creditors to accept a “haircut” or debt-for-equity swap to reduce the financially embattled airline’s debt by just over US$6 billion. Read More » The Jakarta Post reported the plan, unveiled by State-Owned Enterprises deputy minister, Kartika Wirjoatmodjo, will require Garuda to issue zero-coupon bonds to repay state-owned companies. The airline also will need to reduce its routes from 202 to 134. Wirjoatmodjo said Garuda’s US$9.8 billion debt outstripped its assets by US$2.8 billion. If the legal process moved forward, Wirjoatmodjo said, Garuda’s monthly costs could be slashed and the hope would be that by May to June 2022 the airline will break even. However, a court-led settlement plan, similar to those being undertaken by other airlines, runs the risk of being rejected by creditors.
