Good News For Garuda Indonesia, Government Will Look For New Investors After PKPU Process Completes

Garuda Indonesia aircraft. (Photo: Wikimedia Commons)

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir is optimistic about the outcome of the debt restructuring process or the postponement of Garuda Indonesia's debt payment obligations (PKPU). Erick believes that Garuda's PKPU process is going well.

However, he refused to reveal the results because he was still waiting for the court's decision. "Later on June 17th, be patient. His condition is good, but I don't want to preempt the results of the court. Later it will be suspected that there is something wrong," he told reporters quoted on Wednesday, June 8th.

Furthermore, Erick said that after the results of the PKPU decision came out, the government had only stepped into the process of finding investors. "Not yet, when it has been decided, we will look for investors. Where do we want investors to invite us to sign, we don't know what the contents are," he said.

Previously, Deputy Minister of SOE II, Kartika Wirjoatmodjo or Tiko revealed that PT Garuda Indonesia (Persero) Tbk, would conduct two rights issues in 2022. This corporate action was realized in the third and fourth quarters of this year.

Tiko said the rights issue of the issuer codenamed GIAA was to obtain new investors. This step was taken after the PKPU process and the achievement of peace and homologation from the company's creditors.

"As we said before, God willing, if later the PKPU process can achieve peace and homologation, we will conduct two rights issues," said Tiko in a Working Meeting with Commission VI DPR, Tuesday, June 7.

Furthermore, Tiko said that for the first rights issue, shareholders will inject Rp7.5 trillion from the government's portion for the initial position of restructuring Garuda Indonesia.

"Then we will conduct a second rights issue, maybe around the beginning of the fourth quarter for additional funding from strategic investors. As we know in the last Garuda Panja decision, we will limit the government's share portion to 51 percent of Garuda's total share ownership," he said. .

Furthermore, Tiko hopes that this corporate action will run smoothly, especially the capacity of the Indonesia Stock Exchange (IDX) to be able to absorb various rights issues. "Hopefully the capacity of the Exchange to absorb these rights issues is good enough, I hope," he said.

For your information, Garuda has proposed an extension of the PKPU period for the next 30 days or until June 20. Originally, the PKPU would be held on May 20, while the creditor voting would take place on May 17.

This is the second time that Garuda Indonesia has proposed a postponement of the PKPU deadline. Previously, the Panel of Judges of the Central Jakarta District Court had extended the permanent PKPU process for Garuda Indonesia for 60 days.