Indonesia’s Garuda Bids to Delay Vote on Debt Overhaul

 

Indonesia’s flag carrier Garuda has asked administrators to postpone a vote on the airline’s debt overhaul proposal by two days to Friday June 17, its chief executive said.

Creditors had been expected to vote on the restructuring proposal on Wednesday.

CEO Irfan Setiaputra said in a statement that a delay was needed to finalise administrative matters and to harmonise the input of stakeholders on the restructuring proposal.

Garuda started the court-led restructuring process on December 9, after a vendor petitioned the court over unpaid bills.

The court-appointed administrators will discuss the proposed voting delay with the supervising judge, one of the administrators said.

 

Debt Restructuring Proposal

“The administrators will carry out voting by taking into account the readiness of the debtor for its restructuring proposal,” Martin Patrick Nagel, the co-head of FKNK law firm, said.

Garuda has offered to replace its liabilities to lessors and Islamic bondholders with new bonds and equity worth $1.13 billion.

The latest verified claims under Garuda’s restructuring process have reached 120.5 trillion rupiah ($8.21 billion).

The airline said on Tuesday that a majority of the holders of its 2 trillion rupiah ($136.26 million) asset-backed securities “KIK-EBA Mandiri GIAA 01” had agreed on a tenor extension up to 10 years and a new payment schedule.

The securities, which securitised revenue rights from Garuda’s ticket sales on the Jeddah-Medina route, were issued in 2018 with a tenor of five years.

 

• Reuters with additional editing by Jim Pollard

 

 

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