KONTAN.CO.ID - JAKARTA. The Indonesian government still favours a court supervised debt restructuring process for flag carrier Garuda Indonesia while opening the possibility of getting new investors into the company, a deputy cabinet minister said on Tuesday. Garuda is seeking to reduce its total debt to $3.69 billion from $9.78 billion in September and a court-led solution will be a faster option, Kartika Wirjoatmodjo, deputy minister of state-owned enterprises said in a parliamentary hearing. The company's finances deteriorated as the coronavirus pandemic disrupted global travel.
Last month a Jakarta court rejected a so-called PKPU request by cargo company PT My Indo Airlines (MYIA) to restructure Garuda's debt, saying it failed to meet legal requirements. A second creditor has since filed a separate PKPU request in Jakarta against Garuda, the company said. Baca Juga: Copper prices retreat as China property market woes weigh Kartika said renegotiations with dozens of creditors, critical in reducing its leasing and interest rate costs, will take years to conclude while an accord reached in an Indonesian court would bind all of Garuda's creditors. "If this legal process moves forward, we can slash Garuda's monthly costs ... the hope is by May to June 2022, Garuda can break even," he said, although he added there was a risk of bankruptcy if the creditors voted to reject Garuda's settlement plan.
