Indonesia court extends Garuda debt restructuring amid ballooning claims

An Indonesian court on Friday extended the period for Garuda Indonesia's debt restructuring by 60 days to allow the airline more time to complete the verification ofbillions of dollars of claims, the carrier said. State-controlled Garuda is seeking to slash $9.8b in debts to $3.7b under a court-led process, called PKPU, the airline has said. The court in Jakarta, however, had received $13.8b of claims from creditors, lessors and vendors, which the carrier needed to verify, according to state news agency Antara. The court was scheduled to hear creditors' response to Garuda's proposals on Friday, but a delay was granted by the court after a request by Garuda and the majority of creditors, according to the statement. "The additional time provides an opportunity for all stakeholders to complete the verification process and ensure the PKPU runs according to prudent principles," Garuda's CE Irfan Setiaputra said. "The extension also provides us more time to prepare a more mature settlement plan through intense and constructive negotiations," he said. CNBC Indonesia reported Garuda had only verified 148 claims out of 501. Garuda executives and a government official have said the carrier has proposed to creditors to switch parts of the debt to equity, take a debt haircut and subscribe to new 10-year bonds. The process will also include negotiations with plane lessors, which Garuda will ask to take back some planes while also negotiating a cut in lease rates for those it keeps, they said on Jan. 7. <br/>