Garuda Indonesia Receives IDR1 Trillion Fresh Funds From Bonds, What For The Money?

Garuda Indonesia aircraft. (Photo: Doc. Antara)

JAKARTA - PT Garuda Indonesia Tbk. reported that the company has completed the process of disbursing the proceeds from the issuance of Mandatory Convertible Bonds (OWK) amounting to Rp1 trillion.

The disbursement of funds resulting from the OWK issuance refers to the OWK issuance agreement at the end of 2020 which was agreed between Garuda Indonesia and PT Sarana Multi Infrastruktur (SMI) in the context of implementing the National Economic Recovery (PEN) program.

President Director of Garuda Indonesia, Irfaniaputra, said that the disbursement process has been completed by the disbursement proceeds in the first quarter of 2021.

"Of course, this is a momentum in itself for Garuda Indonesia to continue to strengthen its performance recovery efforts in line with the Company's operational fundamentals, which consistently show positive growth," he said in a press statement to VOI, Tuesday, February 9.

Irfan added, the disbursement of the proceeds from the OWK issuance has taken into account the short and medium term working capital needs.

"Of course we do this by prioritizing the principle of prudence and compliance with the provisions of Good Corporate Governance (GCG), so that the use of OWK proceeds can be carried out appropriately according to company needs," he said.

Furthermore, the boss of the national airline said that the funds obtained from the issuance of the OWK would be used to support liquidity, solvency, and to finance the company's operations.

Meanwhile, referring to the OWK issuance agreement that has been obtained with a maximum value of IDR 8.5 trillion and with a maximum tenor of 7 years, it is in accordance with the signing of the OWK issuance agreement at the end of December 2020.

"The implementation of the disbursement of OWK funds which was carried out on February 4, 2021 is IDR1 trillion with a tenor of 3 years," he added.

In terms of performance, until the beginning of quarter 4/2020, Garuda Indonesia managed to record the highest number of passengers during the pandemic.

In November 2020, the Garuda Indonesia Group recorded a number of passengers exceeding the number of passenger transports of more than 1.043 million passengers, which increased quite significantly from the beginning of the pandemic with a record of 30 thousand passengers.

Then, from the cargo transportation business in November 2020, Garuda Indonesia also managed to record a cargo growth of 12.20 percent from the beginning of the 4th quarter of 2020, to 24.6 thousand tons of cargo transportation.

Then, from the aspect of managing production costs, Garuda Indonesia implements strategic efforts through negotiating aircraft rental costs, negotiating with other third parties, and optimizing various supporting costs with monthly savings of 15 million US dollars.

"With the company's performance that continues to show positive growth, we are optimistic that the proceeds from the issuance of the OWK will be able to support the focus on accelerating the Company's performance consistently," concluded Irfan.