Garuda defers periodic distribution under $500 million sukuk

Garuda Indonesia will defer payment of a periodic distribution under its $500 million sukuk trust certificate as it considers “strategic alternatives” to address ongoing challenges amid the pandemic. The payment is due 3 June, the company said in a same-day filing to the Singapore Exchange. Garuda is allowed a 14-day grace period and will provide an update before its expiration. Garuda says it “has taken proactive financial and operational measures” to address “the unprecedented challenges from the effects of the Covid-19 pandemic”. “Despite its efforts, the ongoing decline in air traffic resulting from the pandemic continues to pressure the company’s operations and liquidity,” it states. Garuda states that it will retain a team of advisors comprising Mandiri Sekuritas, Cleary Gottlieb Steen and Hamilton LLP and Assegaf Hamzah and Partners. The $500m sukuk matures on 3 June 2023, after sukuk holders approved last June a three-year postponement of the original 3 June 2020 maturity date.<br/>