Garuda Indonesia halves debt with restructuring, on track for profit - government

Garuda Indonesia has halved its debt and achieved comparable cuts to aircraft leasing costs in negotiations that have set the airline up for profitability, the Indonesian government said on Tuesday. The company had approached financial investors and foreign airlines to increase its capital, Kartika Wirjoatmojo, deputy minister of state-owned enterprises, told reporters. Restructuring of the airline's obligations, agreed this month, has come six months after an unpaid creditor forced it into proceedings for a court-supervised debt moratorium. In negotiations supervised by the court and in out-of-court settlements, Garuda had halved its debt to $5.1b from $10.1b, Kartika said. The company has also renegotiated the terms of aircraft orders and leasing contracts. It was formerly paying abnormally high rents for aircraft. During restructuring, Garuda had managed to cut lease rates for wide-body aircraft by at least 65% and for narrow-body aircraft by 35%, Kartika said.<br/>