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IDX halts Garuda trading after 'sukuk' default
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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.
The carrier has announced plans to return planes to lessors to reduce its operational costs.
Its third-quarter financial report last year shows $1.07 billion in net losses for the first nine months of 2020. However, the full-year net loss remains unknown as Garuda has not yet submitted its 2020 financial report.
Read also: Garuda grounds two thirds of its fleet
The carrier has appointed Guggenheim Securities as its financial advisor, along with Mandiri Sekuritas, Cleary Gottlieb Steen & Hamilton and Assegaf Hamzah & Partners, hoping they could help fix Garuda’s financial situation.
