THE Ministry of State-Owned Enterprises (SOEs) confirmed the bailout scheme for PT Garuda Indonesia Tbk. does not involve direct loans from the government.

According to the Special Staff of the Minister of BUMN Arya Sinulingga explained that Garuda would get a bailout fund of IDR8.5 trillion through the National Economic Recovery (PEN) program. The government will play a role as guarantor for the bailout.

“This bailout is not the National Budget, but it is like a loan given to Garuda Indonesia, and Garuda is looking for anyone who can provide the IDR8.5 trillion in funds. So, the government functions only as a guarantor, not a funder,” he said in Jakarta, Tuesday (2/6).

He emphasized that Garuda Indonesia would not get funds from the government which were sourced from the State Budget (APBN). The funds from the state budget will only be given to SOEs wholly owned by the government. In the context of Garuda Indonesia, the government only has about 60% of the company’s shares. The remaining 25% is owned by PT Trans Airways and the rest is held by the community.

Arya also said that these funds would not be used to pay off the company’s debt. The GIAA-coded stock issuer indeed has a debt that is due to mature quite large, US$500 million. However, this fund will be used as a bailout for working capital.

Meanwhile, the US$500 million debt originating from the global bonds issuance is currently in the process of restructuring. The company is still waiting for the approval of the sukuk holders to extend the principal repayment period.

“So, it is not funds from the state budget that enter Garuda Indonesia, but guarantees Garuda when taking a loan. So, if it is said that the funds will be used to pay debts, it cannot be, because indeed no money has entered Garuda Indonesia,” he noted.

According to him, the amount of IDR8.5 trillion allocated has also been adjusted to the proposal from Garuda. In addition, because it is a guarantor, this facility has more flexible deadlines.

As such, he said if the associated SOEs did not get financing that the government could guarantee this year, then this facility would still be available.

“It’s a guarantee, it will be tried this year, if possible next year. This isn’t money, so it’s not lost. If possible next year, guaranteed again next year,” he added.

Meanwhile, the search for loans was handed over to each SOE company. According to him, the government does not limit certain criteria for financing that can be guaranteed by the government.

“The important thing is that he borrowed must be reversed. Want to use banking, you want to use SMI, the important thing is that he borrowed and returned the interest. If the bailout funds are returned, the government only guarantees,” he concluded. [ special]