Garuda Indonesia posts US$2b net loss in 2020, CEO says

Garuda Indonesia suffered a net loss of US$2b last year, the airline's top executive told parliament, a figure highlighting the dire financial situation faced by the nation's flagship carrier during the coronavirus pandemic. The number was revealed in a presentation by CEO Irfan Setiaputra to lawmakers at a parliamentary hearing on Monday. Garuda has yet to officially release full-year results for 2020, but a $2b net loss would mark its biggest since 2005, the oldest available data on Quick-Factset. The company, majority-owned by the government, posted net income of $6.9m in 2019. The revelation comes on the heels of the Indonesia Stock Exchange's decision on Friday to halt training in Garuda shares until further notice, after the company defaulted on coupon payments on its $500m sukuk, or Islamic bond. In its statement announcing the decision, IDX said the carrier's inability to pay the coupon "indicates that there are problems in the continuity of the company's business." Setiaputra's presentation also showed 2020 sales coming in at $1b -- a marked decrease from $4.5b the year before -- as well as negative equity of $1.9b, meaning total liabilities exceed total assets. "Regardless of whether we opt for the suspension of debt payment obligations or [general] restructuring, we have to start [procedures] this year," Setiaputra told lawmakers. "In the process of making proposals to creditors ... there is a high possibility that we will submit proposals with financial consequences, and debt to equity [transactions]. We [will] ask for permission if the proposal requires political support from the parliament." <br/>