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Garuda enters formal restructuring after ruling on debt petition
The Central Jakarta District Court has accepted a petition filed by an IT company against flag carrier PT Garuda Indonesia, thereby initiating a supervised restructuring process of up to 45 days.
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New face: Garuda Indonesia unveils its new mask livery for its B737-800 NG fleet. The COVID-19 pandemic has hit company hard. (Courtesy of/Garuda Indonesia)
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lag carrier PT Garuda Indonesia has entered a supervised debt restructuring process following a court decision on a debt petition filed by its information technology partner, but the airline has vowed operations would continue unchanged.
The Central Jakarta District Court accepted on Thursday a petition for suspension of debt payment obligations (PKPU) filed by information technology company PT Mitra Buana Koorporindo against the flag carrier.
The ruling initiates the first formal restructuring phase, called temporary PKPU, which can take up to 45 days. Depending on the outcome, this can lead to a second phase lasting up to 270 days.
“The PKPU process is not a bankruptcy process,” Garuda Indonesia president director Irfan Setiaputra said in a press briefing on Thursday. “This process gives Garuda room to negotiate with creditors in a legal corridor. We believe this process underlines Garuda’s commitment to solving its obligations.”
The ruling follows Garuda’s proposal to restructure its debt. The flag carrier, traded on the local bourse under the ticker code GIAA, is in negotiations with some 800 creditors.
In October, a court rejected a similar debt petition filed by cargo company PT My Indo Airlines as the company had failed to meet certain legal requirements.
Read also: Jakarta court rejects debt restructuring request against Garuda
