Flight attendant wearing protective gear during flight with Garuda Indonesia in Denpasar, Bali on Oct 21, 2020. (JG Photo/Yudha Baskoro)
Hours Left for Creditors to Stake Claims in Garuda Indonesia's $9.8b Debt Revamp
BY :JAKARTA GLOBE
JANUARY 05, 2022
Jakarta. State-controlled Garuda Indonesia, the country flag carrier, has urged creditors to register their outstanding claims on the airline with the court-appointed administrator by 05:00 p.m. Jakarta time today to take part in its debt restructuring process.
"We hope that our creditors and business partners can make the most out of this registration stage so that they can actively participate in discussions on our proposed composition plan and use their voting rights," Irfan Setiaputra, Garuda Indonesia's president and the chief executive officer said in a statement on Tuesday.
The administrator will verify creditors' claims between 6 and 18 January and issue a verdict on Jan 19 on whether the claims can go ahead.
The process marks an important milestone in the last-ditch effort to save the 71-year-old legacy airline from bankruptcy.
Garuda entered the Suspension of Debt Payment Obligations (PKPU) process — akin to Chapter 11 of the United States Bankruptcy Code — last month, after judges in the Central Jakarta Commercial Court accepted a petition to suspend debt payments to its creditors.
The airline currently amassed $9.8 billion in debt. Even before the Covid-19 pandemic that brought air travel to a standstill, Garuda struggled to keep afloat amid high cost and aggressive fleet expansion marred by corruption.
To date, Garuda had received "positive and favorable responses" from creditors and airplane lessors, it said in the statement. The airline intended to maintain the support until the voting day, which may not arrive until September. Indonesian law allows the restructuring process to last no longer than 270 days.
The airline ensured its commitment to fairness and efficiency to all creditors as it sought to progress the debt restructuring process.