Garuda Indonesia Wins PKPU, SOE Minister: Improve Domestic Routes

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir ensured that the business of PT Garuda Indonesia Tbk, in the future, will focus on domestic routes, because it is in line with the potential of the very potential domestic flight market.

Erick admitted that he did not want Garuda to be "fashionable" by focusing on working on international routes.

As is known, the state-owned airline Garuda Indonesia has just obtained a homologation or peace agreement with creditors.

The peace agreement is related to a debt restructuring proposal worth Rp. 142 trillion which was processed through the Suspension of Debt Payment Obligations (PKPU).

"Well, what are we doing in a fashion business, it's better if we improve our domestic market, which has a very large market, but only a few overseas ones, even for Umrah/Hajj and cargo, the rest are more domestic. this first," said Erick to reporters, Monday, June 27.

Furthermore, Erick said, Garuda's success in winning PKPU was the result of the hard work of many parties, so that it was able to produce the best decisions.

"That this settlement is concrete is not half-assed, because in making improvements to a company, especially SOEs that must be healthy and also our part is to intervene in the market, such as ticket prices, which are expensive today, this is a balance," he said.

Separately, the President Director of Garuda Indonesia, Irfan Setiaputra, said that the implementation of the company's business plan will be carried out after 30 days after the announcement of the PKPU or starting from Monday 27 June 2022.

"What is clear, thank God, it turns out that we can pass this stage (PKPU) smoothly, today and of course, according to today's agreement, our restructuring process will be continued for 30 days, for finalization with all creditors. one week ago," said Irfan.

He added, the next stage is the implementation of the General Meeting of Shareholders (GMS).

Irfan hopes that the GMS will be held soon so that the company can obtain State Equity Participation (PMN) worth IDR 7.5 trillion.

Garuda will also take corporate actions, including conducting rights issue twice this year.

This step is to strengthen the company's capital. The rights issue will be conducted after the GMS.

Then, the second phase of the rights issue will be carried out in early III to IV for additional funding from strategic investors.

After the second phase of the rights issue process, the government's share ownership in Garuda will be at least 51 percent.

Irfan said management will also operate the aircraft at twice the current number. Where there will be a fleet of 70 aircraft in operation.

"Not reducing the route temporarily, the route is currently classified as profitable, it is likely that the frequency will be increased, and it is possible that some of the routes that we have opened have not been opened yet, will be reopened," he said.