JAKARTA (TheInsiderStories) - The state-owned flight carrier, PT Garuda Indonesia Tbk (IDX: GIAA) continues to develop its cargo businesses by obtained loan facility from the Indonesian Export Financing Agency (Eximbank) Rp1 trillion (US$67.57 million), said the director on Thursday. The loan was provided through a special export assignment program.
Its regulated in the Minister Finance Decree Number 428/KMK.08/2020 concerning a special assignment to the Eximbank to support the Indonesian aviation industry. According to the finance director of the company, Fuad Rizal, the working capital loan have a one year tenure.
Beside get loan, Garuda was also waiting for other government funds to convert its mandatory convertible bond worth of Rp8.5 trillion. The CEO, Irfan Setiaputra, estimates that the budget will be disbursed in the fourth quarter of 2020. He added, the issuer needs Rp9.5 trillion to finance the operations and maintain the liquidity and solvency during 2020 - 2023.
Due to weak financial conditions, the issuer has failed to fulfill its obligation to pay the matured global SUKUK bond worth of $500 million and its asset back securities Rp1.44 trillion. For the global SUKUK, the aviation firm had received the approval from bond-holders to extend the tenure from initially matured on June 3, 2020.
The company also is in talks with Airbus SE (AIR.PA) to delay the deliveries of four aircraft. Earlier the airlines company has cancelled the orders of 49 units Boeing 737 Max 8. Garuda also aims to restructure its aircraft leasing and to terminate unsuited contracts. Early of this year, Setiaputra said will bring in four new Airbus aircraft was order in 2016.
The company ordered around 14 units of Airbus series A330 – 990 Neo type. The booking agreement was witnessed by President Joko Widodo in London, England. In November 2019, the first A330 – 900 Neo had landed.
Currently, Garuda operates 204 aircraft, consisting of 139 fleets use by the company and 62 aircraft operated by its unit PT Citilink Indonesia. As many as 105 units are narrow body type aircraft and 34 units of wide body type.
A total of 181 aircraft operated by the airlines are chartered, while 20 are owned by the company. Setiaputra admitted that the flight company explores various options to overcome the company’ debts amid the COVID-19 outbreak.
Quoting the 2019′ financial statements, Garuda has a total loan of $1.83 billion and a net loan of $1.53 billion while the equity share reached $720.62 million. Its mean, the debt to equity position around 2.55 times and net debt to equity ratio about 214 percent.
Setiaputra stated, beside renegotiate with its creditors, the issuer is also seeking financing support from financial institutions. In addition, the airline planned to cut its expenses by 20 percent, and is seeking some form of government support.
US$1: Rp14,800
Written by Editorial Staff, Email: theinsiderstories@gmail.com
