Unable To Pay Interest On Global Bonds, Garuda Indonesia: Even Though It's Hard, But We Have To Postpone

Garuda Indonesia pilots are seen waving from inside the plane's cockpit (Photo: Doc. Angkasa Pura II)

JAKARTA - The national airline PT Garuda Indonesia Tbk. announced the decision to postpone the payment of global sukuk coupons from the grace period of 14 days ending on June 17, 2021.

Garuda Indonesia President Director Irfan Setiaputra said the delay was taken based on the company's financial performance which was significantly affected by the COVID-19 pandemic.

Meanwhile, the company announced the announcement through the Singapore Exchange Announcement and the Indonesian Stock Exchange Electronic Reporting System and the Financial Services Authority (OJK).

"Our decision to postpone the payment of global sukuk coupons is a tough step that cannot be avoided and must be taken amidst the focus on improving business performance and the challenges of the aviation industry due to the pandemic which is still ongoing," he said in a press statement on Thursday night, June 18.

Despite being hit by financial turbulence, Irfan admitted that Garuda received moral support from various parties who wanted the government's official airlines to remain in the sky.

"We also express our appreciation for the support that is always given by the sukuk holders for the efforts that the company is currently optimizing for the sustainability and future of Garuda Indonesia's business in this challenging time," he said.

Furthermore, the state-owned company is said to have appointed Guggenheim Securities, LLC as a financial advisor who will support measures to restore performance, particularly through evaluating the strategy to be taken.

"The appointment of this financial advisor is also a manifestation of our seriousness in ensuring continuous steps in restoring performance to run optimally, especially supported by strategic partners who have competent competence and experience," he explained.

Irfan hopes that the uncertainty of the aviation industry's business climate will soon pass so that the company can improve business resilience in supporting Garuda Indonesia's commitment to continue to act as Indonesia's national flag carrier.

"Our goal is to be able to return to being a competitive, adaptive and healthy business entity and able to answer business challenges that exist in the future," he said.

For information, this BUMN which is engaged in the aviation industry is in a financially burdened condition following a trade debt of US$4.9 billion or equivalent to Rp.70 trillion.