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Garuda gets $382 million in loans from BRI to fund working capital
Both facilities, Garuda said, would be due on Dec. 21.
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A Garuda Indonesia airplane. The airline has received three loan facilities from state-owned Bank Rakyat Indonesia (BRI) with a total value of US$382 million to fund its working capital. (Shutterstock.com/e X p o s e)
N
ational flag carrier Garuda Indonesia has received three loan facilities from state-owned Bank Rakyat Indonesia (BRI) with a total value of US$382 million to fund the airline’s working capital
The publicly listed airline received a $50 million short-term loan from the bank with an interest rate based on the one month London Interbank Offered Rate (LIBOR) plus 2.85 percent per annum, the company said in a statement posted on the Indonesia Stock Exchange (IDX) website on Tuesday.
Garuda also received a second loan facility with a ceiling of Rp 2 trillion ($132 million), which includes a Rp 1 trillion facility for its subsidiary low-cost carrier Citilink Indonesia, the company said. The interest rate for this facility ranges from around 8.25 percent to 10.75 percent annually.
Both facilities, Garuda said, would be due on Dec. 21.
Read also: Garuda switches focus to cargo, chartered flight businesses amid ‘mudik’ ban
“These transactions aim to fund our working capital, including to pay for fuel, airplane lease and other activities, that will support the company’s main business,” the airline said.
Garuda has been trying to maintain its cashflow amid the slumping aviation industry caused by the COVID-19 pandemic through several efforts, such as cutting employees' and executives' salaries as well as opening a discussion with holders of its dollar-denominated sukuk that will be due in June.
Aside from the two facilities, the company also obtained a bank guarantee or standby letter of credit (SBLC) facility denominated in rupiah with a ceiling equivalent to $200 million.
“The provision for this facility stood at 1 percent of the issued SBLC amount and 0.25 percent of the issued bank guarantee, or at least Rp 500 million,” Garuda said in the statement.
Read also: Garuda opens dialogue with sukuk holders as it struggles to pay dues
The health crisis has led to the closure of most of Garuda’s flights and a steep decline in passengers due to travel restrictions placed to curb the spread of the disease.
Garuda stocks had risen more than 3 percent as of 11:17 a.m. Jakarta time in Wednesday trading, in contrast with a 0.61 percent fall seen by main gauge Jakarta Composite Index (JCI). Stocks of BRI had weakened 0.38 percent.
