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THE national flag carrier, PT Garuda Indonesia Tbk. targets the debt restructuring process to be completed in 2021.
In his letter to the Indonesia Stock Exchange, Garuda Indonesia’s Director of Finance and Risk Management Prasetio said the company had not been able to submit a timeline for the restructuring process until the restructuring plan had been finalized.
“However, the company targets the restructuring process to be completed in 2021,” he explained in a letter, Friday (6/25).
Prasetio said that the controlling shareholder, in this case the Ministry of SOEs, has also committed to full support for GIAA in the debt restructuring process through the formation of the Garuda Indonesia Restructuring Acceleration Team.
Previously, the rescue of PT Garuda Indonesia Tbk. leading to a restructuring option, of the 4 options offered by the Ministry of State-Owned Enterprises (BUMN).
Meanwhile, the President Director of Garuda Indonesia, Irfan Setiaputra, explained that in the second option, the steps taken were restructuring through the Suspension of Debt Payment Obligations (PKPU). Although through PKPU, Garuda does not necessarily go bankrupt. PKPU is only a delay in paying debt obligations, not bankruptcy.
However, he continued, once entered into the PKPU, after 270 days or 9 months there was no agreement between the creditor and the debtor, the company automatically went bankrupt. Thus, he said, there is always a risk that the company could go bankrupt when it enters the PKPU.
“If you are asked if you are still able to save Garuda. The answer is still and should be. The choice that we took did lead to the second and third options, namely Restructuring. Because the current debt can not be borne by all the government. This debt is also in the past,” he said, Monday (6/21).
He believes the second option is the most rational option from the company’s calculations. According to him, if this option can be executed properly, Garuda can still obtain the results of negotiations with creditors, which until now have been calculated at IDR 70 trillion. This includes BUMN creditors who are also currently difficult to accept offer proposals in any form.
Irfan also needs the support of a number of parties in order to enter into this restructuring. First, there must be confidence and certainty regarding the settlement of negotiations on the company’s debts and receivables.
Therefore, this national airline must have a solid plan over the long term that the restructuring will be completed and this has been agreed by Garuda’s creditors.
Second, he continued, on this basis, the company must have a proposal offered to creditors related to restructuring instruments. In connection with the proposal, he said, there is a possibility of converting debt into shares or debt to equity swap.
“This could be an offer but must wait for shareholder approval. We are still looking at what proposals will be submitted by us with the advisors. We haven’t reached that point yet, with the consultants, when the time comes, we will submit a proposal to creditors of IDR 70 trillion, which is more sustainable and we can afford to pay,” he added.
Furthermore, Garuda Indonesia has also appointed Guggenheim Securities, LLC as a financial advisor who will support the recovery of the Company’s business performance, particularly through various strategic evaluations that will be taken to improve the Company’s fundamental performance together with other strategic partners such as PT Mandiri Sekuritas, Cleary Gottlieb Steen & Hamilton LLP and Assegaf Hamzah & Partners. [bisnis.com/photo special]
