Debt Restructuring Saves Garuda Indonesia From Critical Conditions

Illustration (Photo: Doc. Antara)

JAKARTA - Debt restructuring in the framework of the transformation of Garuda Indonesia is one of the largest in the history of SOEs so they managed to save the national airline in critical condition.

This was conveyed by the Director of Finance and Risk Management of Garuda Indonesia, Prasetio when Sebelas Maret University (UNS) Surakarta confirmed an Honorary Profesor for Business Law at the Faculty of Law (FH) UNS with an Academic Senate Open Session held at the Auditorium GPH Haryo Mataram UNS.

"The company is also continuing with the trust of more than 300 domestic and foreign creditors," Prasetio said as quoted by Antara, Sunday, October 16.

Prasetio's achievement is a form of his commitment to the practice of the Business Judge Rule (BJR), as a field of science he has studied for more than 20 years.

BJR is a principle or doctrine contained in the company's law aimed at protecting policies or business decisions taken by the board of directors on behalf of a limited company.

Not only that said Prasetio, but Garuda Indonesia's success in obtaining a debt reduction from 10.1 billion US dollars to 5.1 billion US dollars also makes the company's balance sheet healthier for sustainable growth in the future.

In addition, after homologation, Garuda Indonesia was able to record a net profit of US$3.76 billion, where the net profit was contributed by the results of financial restructuring through the Suspension of Debt Payment Obligations (PKPU) which was recorded through the company's book profit, so that currently Garuda Indonesia has stronger solvability.

In his academic view, regarding the basic principles of BJR's practice, especially through the business performance restructuring process, Prasetio assessed that there are 4 important funds that need to be considered, first, Good Faith, Best Interest, and Prudentiality, secondly avoiding greater losses (profit), thirdly avoiding neglect of authority, and fourthly compliance.

He sees that it is important for real business practitioners and sectors, especially the executive level of SOE management to have good BJR capabilities.

This is closely related to the lack of understanding of BJR, which is mostly due to a lack of written studies or justification before decision-making.

He said, the potential for waiver of authority so that there is still the potential for personal interests (moral hazard) is also the cause of BJR not being optimally implemented.

"I believe that a good understanding of BJR will be an important foundation for accelerating the performance of a company, especially BUMN entities," he said.

Therefore, one of the efforts that need to be strengthened is through the reconstruction of a business and legal approach based on the principle of benefit, so that SOEs can have a stronger and wiser performance base through the alignment and consistency of the implementation of BJR in every business aspect in corporations.