PT GARUDA Indonesia Tbk has agreed to extend the credit agreement period for the loan facility with PT Bank Mandiri Tbk to December 16, 2020 to March 31, 2021.

Previously, this debt agreement was valid from 16 December 2019 to 15 December 2020. Referring to the financial statements per September 2020, GIAA obtained IFG Non-Cash Loan-Customized facilities from Bank Mandiri.

The interest is 8.5% per year with funds of IDR300 billion that can be used by Citilink, with a total sublimit of Garuda facilities from Bank Mandiri of IDR2.7 trillion.

According to Garuda Indonesia Director of Finance and Risk Management, Prasetio, said the transaction with Bank Mandiri is an affiliated transaction with a company that does not contain a conflict of interest. Based on the agreement, the parties agreed to extend the term of the agreement from 16 December to 2019 to December 2020 to 16 December 2020 to 31 March 2021.

“This extension is based on the consideration of an extension of the current outstanding IFG Non-Cash Loan facility which is extended until March 31, 2021,” Prasetio said.

He explained that this comes from the company’s previous working capital requirements including, but not limited to, the purchase of fuel, which supports the company’s main business activities. The agreement is for banking facilities from Bank Mandiri in the form of IGF non-cash loan facilities and treasury line facilities which have been implemented in stages since 2016.

“There is a need for the company to implement hedging transactions as an effort to mitigate the company’s risk from movements in the rupiah exchange rate in foreign currencies. There is no change in the number of facilities and other terms of the agreement, including interest and guarantees,” Prasetio concluded. [ special]