PT GARUDA Indonesia is preparing to propose a 3-year maturity extension to its US$500 million Islamic bonds that are coming due on June 3, the company said in a statement late recently.
According to the President Director of PT Garuda Indonesia Tbk, Irfan Setiaputra in its official release said, Garuda Indonesia had prepared a proposal for the extension of the repayment of Garuda Indonesia Global Bonds Limited Trust Certificates in the amount of US$500 million which will mature on June 3, 2020.
“The proposal for the extension of the time to repay the global bonds which are due will be submitted for a minimum period of 3 (three) years and submitted through a proposal for approval (consent solicitation) to the bond holders.
Garuda Indonesia said it has submitted the proposal to Indonesia’s Financial Services Authority, as well to bondholders through the Indonesia and Singapore stock exchanges, and the company will seek holders’ approval on June 10. Garuda is struggling to repay its debt as the coronavirus outbreak disrupts air travels globally. If in the future the shareholders agree and the bond holders are similar, the Garuda Indonesia Global Bonds Limited Trust Certificates will mature in June 2023.
“Through the approval solicitation request for this bonds, Garuda Indonesia can strengthen the management of the company’s liquidity ratio on a more favorable scale so that we can optimize efforts to improve the Company’s performance more dynamically,” Irfan noted.
He explained that the COVID-19 pandemic was inevitable and had a significant impact on the performance of Garuda Indonesia. However, Garuda claims to be very optimistic that it can pass this phase well and can be more adaptive and ready to accelerate in the new normal conditions by ensuring maximum business continuity.
Unfortunately, I still haven’t explained the yield offered to the GIAA bonds holders. To be sure in the national economic recovery program, the government plans to provide investment bailouts for working capital to PT Garuda Indonesia Tbk in the amount of IDR8.5 trillion. The government is also finalizing a funding plan for Garuda worth US$1 billion. With an exchange rate of IDR14,900 per US dollar, this is equivalent to IDR14.9 trillion. [sources/photo special]