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Indonesia lawmakers back $522 million capital top-up for airline Garuda – Metro US

Indonesia lawmakers back $522 million capital top-up for airline Garuda

The Garuda Indonesia’s sign is seen on its aeroplane parked
The Garuda Indonesia’s sign is seen on its aeroplane parked at the Garuda Maintenance Facility (GMF) AeroAsia, at Soekarno-Hatta International airport near Jakarta

JAKARTA (Reuters) – Indonesian lawmakers on Friday approved the government’s plan to top up Garuda Indonesia’s capital by 7.5 trillion rupiah ($522.43 million) this year, once the carrier reaches a debt settlement with creditors, a government official said.

The approval was decided by a group of lawmakers tasked to deliberate on the government’s strategy to save the debt-laden airline, said Arya Sinulingga, an aide to the state-owned enterprises minister.

A wider vote is typically needed to finalise the decision.

Garuda’s chief executive Irfan Setiaputra thanked lawmakers for the decision, describing it as an important part of Garuda’s restructuring.

The flag-carrier has been trying to renegotiate its debt with creditors under a court-led process since the end of last year.

The restructuring has been extended twice to verify $13.8 billion worth of claims against it, compared with a total of $9.8 billion liabilities that Garuda said it has on its books.

The court has given Garuda until May 20 to finish verification and negotiations with creditors.

The state-owned enterprises ministry in a statement said the lawmakers asked the ministry and Garuda to implement its business plans, which should improve the its finances in the future. It did not elaborate.

Garuda said in a statement as part of the deliberation, the lawmakers’ group “has conveyed its understanding of a potential involvement of a strategic investor to support the restructuring” of its performance.

The airline did not name the investor and did not respond to further queries.

Billionaire businessman Chairul Tanjung, Garuda’s second-biggest shareholder through its company PT Trans Airways, has said he wants to top-up his investment.

($1 = 14,356.0000 rupiah)

(Reporting by Stefanno Sulaiman; Writing by Gayatri Suroyo; Editing by Martin Petty)

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