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PT Garuda Indonesia Tbk claimed to be preparing three options for the settlement of global debt worth US$498.99 million, which will mature on June 3, 2020.
The scheme: full repayment, extension of maturity, and payment at discounted debt prices. Only, these schemes are not easy and have their own challenges. Currently acting as a consultant or advisor in Garuda Indonesia debt restructuring is PT Mandiri Sekuritas.
According to Garuda Indonesia’s Managing Director Irfan Setiaputra, the three options are still being discussed with GIAA shareholders, namely the government through the Ministry of State-Owned Enterprises (BUMN) and PT Trans Airways.
“We have an in-depth discussion of debt repayment options because we consider the current situation and the cash flow position,” Irfan said during a virtual meeting with the House’s Commission VI, Wednesday (29/4).
Garuda Indonesia is aware of debt settlement options such as extension of maturity and payment at discounted prices that poses a financial risk, capability and the company’s reputation.
As of June 2015, the global price of Garuda Indonesia debt in June 2015 has fallen by around 40% from the original price. This price is still potentially discounted up to 60-70%. Inevitably, this will be Garuda’s own challenge to solve it,
“In addition, the Garuga Indonesia debt restructuring proposal to state-owned banks with refinancing funding requests will also face challenges. Enter the finalization stage. This option also has a challenge because SOE Banks are tightening lending during the COVID-19 pandemic,” Ifran noted.
In an explanation to the Indonesia Stock Exchange (IDX), Garuda Indonesia’s business was increasingly hit by the spread of COVID-19. Frequency of flights to China from the end of January 2020 has been cut.
May-June, which was supposed to be a high season for the aviation industry, including Garuda Indonesia because of Eid al-Fitr and also the school holidays this time also beaten because of the ban on going home. It is increasingly hard for Garuda Indonesia to have if there were no hajj flights in 2020.
For the record: throughout 2019, the company managed to score a net profit of US$6.98 million after in 2018 suffered a net loss of US$231.16 million. The recovery in performance was in line with total operating revenues, which rose 5.5% to US$4.57 billion from US$4.33 billion.
The increase in revenue growth was followed by scheduled flight contributions which reached US$3.77 billion. Meanwhile, unscheduled flights recorded US$249.91 million and others amounted to US$549.33 million in 2019. [kontan.co.id/photo special]
