Posted 17 May 2006 @ 07:09
Updated 17 May 2006 @ 07:18
JAKARTA, 17 May 2006 - Indonesia's government will seek approval from the creditors of national carrier Garuda Indonesia to dramatically cut its debt in a restructuring plan to be discussed this week, the transport minister said. Under the plan, the carrier's debt would be reduced from around 794 million dollars to 274 million dollars and require creditors to convert up to 30 percent of its debt into equity, Hatta Rajasa was quoted by AFP as saying late Tuesday.
"The remaining Garuda debt should total 274 million dollars," he said after government ministers met to discuss the restructuring plan. He said a steering committee of government and Garuda officials would be formed to negotiate with creditors. The debt restructuring talks are scheduled for May 19 in Singapore and May 21 in London, he said.
At end-2005, Garuda owed around 794 million dollars, mostly to European export agencies. Last December, the airline defaulted on a 56 million dollar debt payment. The carrier has been hard-hit by plunging arrivals on the resort island of Bali where Islamic extremists launched a triple suicide bombing last October, killing 20 people. Garuda has said that European creditors had previously given their blessing to a proposal to reschedule debt payments but had yet to decide the terms and conditions.
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