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IDX suspends trading of Garuda Indonesia shares after airline defaults on sukuk

Vincent Fabian Thomas (The Jakarta Post)
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Jakarta
Fri, June 18, 2021

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IDX suspends trading of Garuda Indonesia shares after airline defaults on sukuk Better days: National flag carrier Garuda Indonesia introduces its new Airbus A330-900 NEO at Soekarno Hatta International Airport in Tangerang, Banten, on Nov. 27, 2019. The pandemic-induced crisis has hit the publicly-listed company hard. (JP/Dhoni Setiawan)

T

he Indonesia Stock Exchange (IDX) has temporarily halted trading of Garuda Indonesia shares after the national flag carrier failed to make timely coupon payments on its global sukuk.

The airline operator announced on Thursday that it would delay payment as the COVD-19 pandemic had impacted its financial condition.

Garuda president director Irfan Setiaputra said the carrier was focusing on improving its business performance while the pandemic had yet to end.

“This delay on the global sukuk coupon payment is unavoidable and difficult but it must be done,” Irfan said in a statement on Thursday.

The delay was announced through Singapore Exchange, IDX’s electronic reporting system and the Financial Services Authority (OJK). The company was initially due to make payments on its US$500 million sukuk on June 3 but was granted a 14-day grace period, before failing to make the payment on June 17.

Read also: Garuda’s recovery from debt crisis hinges on business restructuring

According to the State-Owned Enterprises (SOEs) Ministry, Garuda’s condition has continuously deteriorated. It estimates the carrier’s debt at more than $4.5 billion and monthly loss at more than $100 million. The carrier had more than $23 million in unpaid wages on Dec. 31, 2020. 

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