In The Midst Of A Debt Problem Of IDR 70 Trillion, Garuda Indonesia's Shares Are "parked" On The IDX, Why?

Garuda Indonesia aircraft. (Photo: Doc. Garuda Indonesia)

JAKARTA - PT Garuda Indonesia (Persero) Tbk is being busy discussing the issue of jumbo debts worth Rp. 70 trillion that lingers in the company. And this time, the issuer codenamed GIAA is being watched by the Indonesia Stock Exchange (IDX).

In a statement, the IDX temporarily suspended trading of Garuda Indonesia shares. This is in line with the company's move to delay payment of global sukuk coupons.

IDX has stopped trading Garuda Indonesia shares since Friday, June 18 this morning. The position of GIAA's share price is still at the level of Rp222 per share.

Meanwhile, throughout 2021, GIAA's shares have fallen 44.78 percent. Meanwhile, PT Garuda Indonesia (Persero) Tbk announced the postponement of the payment of global sukuk coupons from the grace period of 14 days ending on June 17, 2021.

"The company today announces with a heavy heart that it will continue to delay the payment of the Periodic Dividend due on June 3 based on the USD 500 million Garuda Indonesia Global Sukuk Limited Trust Certificate due 2023," said Garuda Indonesia President Director Irfan Setiaputra in a press release.

Despite this decision, Garuda hopes to continue to provide safe, reliable and quality air travel for Indonesia and users of general travel services.

The postponement, which was conveyed by the company through the Singapore Exchange Announcement and the Electronic Reporting System of the Indonesia Stock Exchange and the Financial Services Authority (OJK), was claimed to have taken into account the condition of the company which was significantly affected by the COVID-19 pandemic.

"Garuda Indonesia's decision to postpone the payment of global sukuk coupons is a tough step that cannot be avoided and must be taken by the company amid the focus on improving business performance and the challenges of the aviation industry due to the ongoing pandemic," he said.

However, management still expresses its appreciation for the support given by the sukuk holders for the efforts made by the company for the sustainability and future of Garuda Indonesia's business.

Furthermore, Irfan explained that the company has appointed Guggenheim Securities, LLC as a financial advisor who will support the recovery of business performance, particularly through various evaluation strategies that will be taken to improve the company's performance together with other strategic partners such as PT Mandiri Sekuritas, Cleary Gottlieb Steen & Hamilton. LLP, and Assegaf Hamzah & Partners.

"The appointment of this financial advisor is also a manifestation of our seriousness in ensuring that Garuda Indonesia's continuous steps in restoring the company's performance run optimally, especially supported by strategic partners who have sufficient competence and experience in supporting the company's efforts to get through this difficult time," he said.

Garuda, he continued, believes in the company's capability in increasing business resilience amidst the current uncertainties in the aviation industry's business climate.