JAKARTA - Deputy Minister of SOEs II Kartika Wirjoatmodjo revealed the current financial condition of the national airline Garuda Indonesia. In a meeting with Commission VI of the House of Representatives, Tiko asked for his blessing regarding the possibility of a dilution option, aka a decrease in the percentage of share ownership.
"We ask for the support of your opinion, ladies and gentlemen, if there are new shareholders, are we allowed to do dilution instead of government ownership," he said in a meeting with Commission VI, at the DPR Building, Parliament Complex, Tuesday, November 9.
The dilution option is if the company still needs funding to continue its business in the future after the restructuring. Funding will come from third parties.
Furthermore, Tiko also gave a signal that the government may no longer be the winner of the majority stake in Garuda Indonesia Airlines.
"It may even be that the government is no longer in the majority, so we ask for support from ladies and gentlemen," he said.
According to Tiko, Garuda's rescue is also more than half of its power to rely on creditors. This is because the amount of debt obligations that are the airline's burden to creditors.
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Meanwhile, to carry out the restructuring, Garuda needs at least US$527 million in funding from the government, equivalent to Rp7.5 trillion.
Furthermore, Tiko said the funding could consist of interim funding of US$90 million in the form of a senior secured loan, as well as additional funding of US$437 million as a form of funding requirement after the restructuring process is complete.
"In addition, if the available funding for Garuda is still not sufficient, then Garuda will carry out a fundraising process from third parties that will allow dilution of government ownership," he said.
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