Garuda negotiating with creditors

(JAKARTA) Garuda Indonesia is still negotiating with its creditors on possible options for the settlement of the airline's US$794 million in debts, the Jakarta Post reports.

'There has been a meeting with our creditors, but we are still waiting for their agreement,' Garuda chief executive Emirsyah Satar said on Thursday, following the signing of a cooperation agreement between the airline, the Indonesian Advocates Association and the Indonesian Indigenous Businessmen's Association in Jakarta.

He declined, however, to disclose the outcome of the meeting held last month in Singapore. 'Garuda has already proposed that a portion of the debt be restructured. But we cannot make any statements as the figure has not been finalised yet,' he said.

Garuda has total debts of about US$794 million, which consists of US$510 million owed to the European Credit Agency (ECA), US$130 million to its medium-term bond and promissory note holders in Singapore and US$150 million to Bank Mandiri and state airport operators Angkasa Pura I and II.

Mr Emirsyah said that ECA representatives will visit Indonesia in the first or second week of February to discuss the debt problem with representatives of the Office of the State Minister for State Enterprises, which directly oversees the airline. He further said that the company was paying instalments of about US$80 million annually on the debt.

Meanwhile, the Central Jakarta Commercial Court on Thursday turned down a bankruptcy petition filed by IT consultants PT Magnus Indonesia against the national flag carrier, according to the Jakarta Post.

Magnus filed the bankruptcy petition against Garuda after accusing the latter of failing to pay its fees.

Source:
The Business Times, Singapore
February 4, 2006