Strengthening Performance Restructuring, Garuda Indonesia Receives KIK-EBA Restructuring Approval

Garuda Indonesia aircraft. (Photo: Wikimedia Commons)

JAKARTA - The national airline, PT Garuda Indonesia Tbk, has succeeded in obtaining approval for the restructuring of the company's obligations to the Mandiri GIAA 01 Collective Investment Contract for Asset-Backed Securities (KIK-EBA).

The restructuring was obtained through an agreement to extend the KIK-EBA payment tenor to 10 years as well as scheduling a new payment with a balloon payment mechanism referring to the investment contract and applicable supporting provisions.

The approval was obtained through the General Meeting of Mandiri Asset Backed Securities Holders GIAA 01 which was held on Monday, June 13. The approval and support of KIK-EBA holders for the restructuring proposal is represented through voting results with the approval of votes of 92 percent of the total KIK-EBA holders who are present and have met the threshold requirements.​

President Director of Garuda Indonesia, Irfan Setiaputra, said that the approval of the restructuring of the fulfillment of business obligations by KIK-EBA holders has an important meaning for the continuous support of strategic partners.

"Especially for KIK-EBA holders regarding the company's performance outlook in the midst of a performance restructuring phase that we are carrying out intensively and thoroughly in all business lines," Irfan said in his statement, Tuesday, June 14.

KIK EBA Mandiri GIAA 01 is a Garuda Indonesia investment instrument launched in 2018 where the company securitizes revenue rights from the sale of Garuda flight tickets on the Jeddah and Madinah routes to KIK-EBA holders worth IDR 2 trillion with a tenor of 5 years.

In the midst of the ongoing Debt Payment Obligation (PKPU) process, this KIK-EBA restructuring stage is one of the focuses of accelerating performance recovery which is carried out carefully and prudently in accordance with applicable regulations.

This is done by taking into account that KIK EBA has different specifications from the components of business obligations where this investment instrument is not classified as a debt category but as a collective sale and purchase contract referring to the provisions of the Financial Services Authority (OJK) number 65/POJK.04/2017 concerning guidelines for issuance and reporting of asset-backed securities in the form of collective investment contracts. Thus, the stages of settlement of the company's obligations under this investment contract need to be carried out through the applicable investment contract management guidelines.

"This approval for the restructuring of KIK EBA is a positive outlook in the midst of a comprehensive restructuring process that is being intensified by the company through the PKPU process. We thank you very much for the support from KIK EBA holders for the sustainable steps that we continue to optimize for the sustainability and future of Garuda Indonesia's business in the current phase. full of these challenges," concluded Irfan.