Welcoming The Garuda Indonesia Rescue Committee Formed By The DPR, Erick Thohir: The Ministry Of SOEs Is Not Alone

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir positively welcomed the formation of a working committee (Panja) to rescue PT Garuda Indonesia (Persero) Tbk by Commission VI of the DPR. According to him, the formation of the working committee is a form of concrete support from the DPR in overseeing the restructuring process for the state-owned airline.

"The Working Committee is a commitment and a follow-up to the discussion of a number of work meetings and hearings that have been held several times between the Ministry of SOEs and Commission VI of the DPR RI," Erick said in Jakarta, Wednesday, February 16.

Erick said that political support from Commission VI of the DPR is very important for the Ministry of SOEs in restoring Garuda Indonesia's performance. The Ministry of SOEs together with Commission VI of the DPR RI will continue to work together in finding solutions to the problems experienced by Garuda Indonesia.

Erick also said that the Ministry of SOEs would explain in detail the business plan and future transformation of Garuda Indonesia to Commission VI of the DPR RI.

"As I have often said, we (BUMN) certainly cannot be alone, this is the era of collaboration, including in improving the performance of Garuda Indonesia, which also requires the support of Commission VI of the DPR," he said.

Commission VI of the DPR RI, continued Erick, will oversee the transformation and restructuring process that is being carried out by Garuda. Erick said that transformation is a must for Garuda Indonesia to be able to survive in a situation full of uncertainty due to the pandemic and also to look at the post-pandemic business prospects.

Not only that said Erick, but the Ministry of SOEs has also collaborated with the Attorney General's Office (AGO) to follow up on indications of alleged corruption at Garuda Indonesia.

"Complete improvements from the law enforcement side and the business side aim to make Garuda in the future more accountable, professional, and transparent," he said.

As previously reported, the equity balance of PT Garuda Indonesia (Persero) Tbk has surpassed that of PT Asuransi Jiwasraya (Persero). He said that Garuda Indonesia experienced negative equity of US$2.8 billion or equivalent to IDR 40 trillion.

Deputy Minister of BUMN II Kartika Wirjoatmodjo said that the drop in the level of Garuda Indonesia's balance sheet was also caused by the statement of financial accounting standard (PSAK) 73 made by the company in 2020-2021 which caused the impact of the decline in equity to deepen.

"PSAK 73, making long-term operating lists a cost at this time feels heavy, because all future costs of all long-term liabilities are MVP or are currently recorded, the balance sheet is hit because of PSAK 73," he said in a meeting with Commission VI DPR, Tuesday, 9 November.

According to Kartika, this position has technically dragged the company into bankruptcy. "In this condition, in terms of banking, it is technically bankrupt, but not yet legally, this is what we are currently trying to figure out how to get out of this position," he said.

Furthermore, Kartika said, the assumption of bankruptcy is because in practice some of Garuda Indonesia's obligations have not been paid. In fact, the salaries of employees have been cut since 2020. As for the salaries of company officials, some have been withheld.

"So we must understand together that Garuda's situation is actually technically bankrupt. Because no longer-term obligations have been paid, including global sukuk, including himbara and so on," he said.

Tiko as he is familiarly called, explained that Garuda's debt position reached 9.8 billion US dollars. According to him, arrears in payments to lessors of 6.3 billion US dollars are the largest debt. Because there is a long-term component, and there was a component that didn't pay off in the short term.

"If it is stated that the debt is recorded at 7, plus then the debt from the lessor which has not been paid back is 2 billion US dollars, so the total is actually 9 billion US dollars," he said.

Meanwhile, the company's assets are only US$ 6.9 billion. Tiko said the financial problems at the national airline were due to a combination of past corruption and declining revenues during the COVID-19 pandemic.