Breaking News
Investing Pro 0
🙌 It's Here: the Only Stock Screener You'll Ever Need Get Started

Garuda Indonesia wins creditors' approval for $9 billion restructuring

Published Jun 16, 2022 07:07PM ET Updated Jun 17, 2022 09:37AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: A worker walks on a crane as a Garuda Indonesia's aircraft is parked at the Garuda Maintenance Facility (GMF) AeroAsia, at Soekarno-Hatta International airport near Jakarta, Indonesia, January 21, 2022. REUTERS/Willy Kurniawan 2/2
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

By Stefanno Sulaiman

JAKARTA (Reuters) - Garuda Indonesia's proposal for restructuring its more than $9 billion debt won the approval on Friday from the vast majority of the airline's creditors, court officials said, staving off the risk of bankruptcy at the embattled flag carrier.

More than 95% of creditors who attended Friday's vote on the plan at a Jakarta court accepted Garuda's proposal, enough to reach agreement for all who submitted claims, a team of court-appointed administrators said.

About 142 trillion rupiah ($9.58 billion) in claims against Garuda would be settled by the agreement, which is set to be ratified by a judge on Monday.

The plan was for aircraft manufacturers, lessors, maintenance vendors, and Islamic bond investors, which hold the biggest chunk of liabilities, to take a large debt "haircut", or write-down, and exchange the remaining amount with $825 million of 9-year bonds and $330 million equity.

A Garuda financial adviser said this scheme would restructure about $5.5 billion to $6 billion of liabilities, while the rest, including loans to banks and state firms, like fuel provider Pertamina and airport operators, would be extended without a cut.

"We are committed to fulfill all our responsibilities that we have conveyed in the proposal," a teary-eyed Garuda chief executive, Irfan Setiaputra, told creditors after thanking them for their support.

Those who submitted claims to the court include investors of Garuda's $500 million Islamic bonds, Britain's aircraft engine maker Rolls-Royce (OTC:RYCEY) and European planemaker Airbus.

Garuda's CEO told creditors ahead of the vote that the firm's bond and equity offers had taken into account potential claims by Boeing (NYSE:BA) related to Garuda's plan to terminate its order for 49 of Boeing's 737 MAX 8 planes, even though the U.S. planemaker had not participated in the court process. Boeing will have 30 days from Monday to put forward its claim, estimated at $822 million. If it fails to do so, the offer would be deducted from the total bonds and shares and the remainder would be prorated to other creditors, Setiaputra said.

Rolls-Royce, Airbus and Boeing declined to comment.

Garuda's financial woes were exposed when the pandemic decimated global air travel.

Other Southeast Asian carriers including Malaysia Airlines, Thai Airways , Philippine Airlines and AirAsia X have also gone through corporate restructuring overseen by courts.

Garuda is targeting profitability within 2-3 years by focusing on its most profitable routes and cutting back on its loss-making international routes.

It plans to launch rights issues to strengthen its capital after securing the court-overseen agreement with creditors.

($1 = 14,821.0000 rupiah)

Garuda Indonesia wins creditors' approval for $9 billion restructuring

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email