Garuda Indonesia to seek debt payment suspension: government

Garuda Indonesia will seek suspension of debt payments in an attempt to avoid going bankrupt, an official at the country's Ministry of State Owned Enterprises said on Thursday. Kartika Wirjoatmodjo, deputy minister for state-owned enterprises, told a parliamentary hearing that the airline and the government have "appointed legal consultants and financial consultants to start this process" and that it is "imperative to immediately implement a moratorium or standstill [of debt payments] in the near future." Wirjoatmodjo added that if the majority state-owned carrier cannot reach an agreement with its creditors, it may go bankrupt. The deputy minister said Garuda's non-consolidated debt of $4.5b made the country's flagship carrier virtually insolvent, and with the airline losing $100m a month, "a fundamental restructuring" is needed. "We are intensively talking with management, including minority shareholders and the Ministry of Finance, how the restructuring process of Garuda in the future should be able to reduce this debt" to around $1b to $1.5b, he said. Details on any debt moratorium are yet to be decided, but may include lease payments as well.<br/>