Garuda Indonesia seeks extension for debt recast proceeding

by BLOOMBERG / pic credit:

DISTRESSED flag carrier Garuda Indonesia has asked to extend its court-supervised debt restructuring while it works out how much it owes creditors, an administrator said.

The airline petitioned the Central Jakarta Commercial Court for a 60-day extension, with Airbus SE and engine supplier Rolls Royce plc among creditors also asking for additional time, said Asri, an administrator for the court-supervised debt restructuring, in a meeting with creditors.

Indonesia recently joined peers in opening its borders more freely to accelerate economic recovery and jump-start tourism.

It’s also considering lifting all quarantine requirements for travellers arriving from April.

That could help improve traffic for Garuda, which provides a critical transport network in a country with some 17,000 islands stretching over an area equivalent to the distance between New York and London.

Garuda’s Creditors Vie for Cash in US$9.8 Billion (RM41.23 billion) Debt Revamp Administrators have verified and acknowledged claims from 248 creditors, totalling 46.6 trillion rupiah (RM13.71 billion).

Claims worth 12.7 trillion rupiah have been verified with some disclaimers from Garuda. More than 139 trillion rupiah worth of claims from 229 creditors are still being considered.

Garuda reported an unaudited net loss of US$2.3 billion in 2021 from revenue of US$787 million, according to its presentation during the meeting.

The results compared to a net loss of US$2.44 billion for 2020, with sales of US$1.5 billion.

The carrier’s seat load factor fell to 51% last month, from 55% in January and 65% in December. Indonesia struggled to control the outbreak of the Omicron variant of coronavirus, prompting the government to bring back movement curbs to contain it.