Deputy Erick Thohir: Technically Garuda Indonesia Has Been Bankrupt, Due To Negative Equity Of IDR 40 Trillion Overturned Jiwasraya

Garuda Indonesia aircraft. (Photo: Wikimedia Commons)

JAKARTA - Deputy Minister of State-Owned EnteIDR rises (BUMN) II Kartika Wirjoatmodjo revealed that the equity balance of PT Garuda Indonesia (Persero) Tbk has exceeded PT Asuransi Jiwasraya (Persero). He said that Garuda had negative equity of US$2.8 billion or equivalent to IDR 40 trillion.

"We emphasize that Garuda's balance sheet is currently experiencing negative equity of 2.8 billion US dollars, so this is a record, if the record was previously held by Jiwasraya, now it has been shifted by Garuda. So Garuda's negative equity has reached IDR 40 trillion", he said in a meeting with Commission VI House of Representatives, Tuesday, November 9th.

For your information, PT Asuransi Jiwasraya (Persero) was recorded to have negative equity reaching IDR 38.4 trillion as of December 2020. Meanwhile, Garuda Indonesia as of September 2021 was in a negative position of US$2.8 billion or IDR 40 trillion.

Kartika 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 the long-term operating list a cost at this time feels heavy, because all future costs of all long-term liabilities are MVP or currently recorded, the balance sheet is hit because of PSAK 73", he said.

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 legally, this is what we are currently trying to get out of this position", said the man who is familiarly called Tiko.

Furthermore, Tiko 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 of its long-term obligations, none of it has been paid, including global sukuk, including himbara and so on", he said.

Tiko explained that Garuda's debt position reached 9.8 billion US dollars. According to him, arrears in payments to lessors of US$6.3 billion are the biggest 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 that 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.

"So I am often asked why Garuda's performance has decreased because of what? Is it because of corruption or the pandemic? Yes, both, not one. So it is affected because both of them make Garuda's current condition not good", he said.