Garuda Indonesia Aborts the Global Sukuk Issuances

Indonesian Government to Summon Garuda’s Auditors and Directors Next Week
PT Garuda Indonesia Tbk (GIAA).

JAKARTA (TheInsiderStories) – Local flight carrier, PT Garuda Indonesia Tbk (IDX: GIAA) has aborted its global bond issuances worth of US$900 million in this quarter until get approval from the shareholders, said the company today (01/06). Initially, the state-owned firm targeting to get approval on Jan. 22

“The company is studying alternative funding options to ensure that it can realize its goals of refinancing debt that is due within one year, while also complying with applicable regulations,” said the management in an official statement.

Last December, Garuda Indonesia announces to issue Global Sukuk in 2020 to pay the maturity debt of $1.68 billion in June. The maturity debt will be paid by three schemes. Firstly, the company will issue the bond without special guarantee $750 million.

Beside Global Sukuk, the company also considered to conduct private placement with a value of $750 million. The bonds has tenor until 2024 and will be spent to pay debt which matured in one year.

The last option which takes the company into account is the peer to peer lending in dollar currency of $500 million. The transaction has tenor until 2024 and aims to pay debt matured in one year.

“Considering the transaction is above 50 percent of the company’ capital, so the company should hold a shareholders meeting on Jan. 20, to get approval,” said the management.

Garuda Indonesia was currently facing issues related to the smuggling of Harley Davidson and Brompton involved the CEO and other five directors. Therefore, the minister of state own enterprises Erick Thohir, fired Ari Askhara as the CEO and replaced by Fuad Rizal as the acting CEO.

The minister will also examine closely all parties involved in this case and believes the finance minister and the customs director-general will process them fairly and thoroughly.

Garuda Indonesia also had to be punished by Indonesia’s Financial Service Authority (FSA) and the Ministry of Finance related to financial statements per December 2018. From the evaluation, they imposed several sanctions on the airline and its directors.

The agency stated, its directors would each be fined Rp100 million, in addition to another collective sanction that will be imposed on directors and commissioners who had signed off on the results.


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