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Four lessors agree to Garuda’s debt restructuring proposal: Ministry
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Workers from Garuda Maintenance Facility (GMF) AeroAsia clean a Garuda Indonesia Boeing 737-800 NG airplane at Soekarno-Hatta International Airport near Jakarta, on Jan. 21, 2022. (Reuters/Willy Kurniawan)
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our aircraft lessors have reportedly agreed to a debt restructuring proposal from PT Garuda Indonesia that would allow the government to proceed with its effort to save the debt-laden flag carrier.
State-Owned Enterprises (SOE) Minister Erick Thohir said on Tuesday that 35 other lessors had yet to back the proposal, but the ministry estimated it only needed to secure support from three more lessors for a majority of the debt.
“The good news is, these four lessors, which have agreed to the proposal, are big lessors. Considering the percentage, if we could acquire three more, we could assume the majority of them agree, because the rest are small in size [of debt],” Erick told lawmakers during a meeting with the House of Representatives.
Read also: New Garuda rescue plan seeks $6 billion debt cut
In November last year, the SOE Ministry estimated Garuda Indonesia’s debt burden at US$9.8 billion (Rp 140.6 trillion), including around $6.3 billion owed to aircraft lessors.
The SOE Ministry stated in the past that, without restructuring, the state-controlled carrier would not be able to survive.
Under the proposal, the SOE Ministry plans to cut Garuda’s fleet to 134 aircraft this year, down from previously 202 planes, while also halving to seven the number of aircraft types.
