PT Garuda Indonesia, rated the world’s most improved airline, may finish more than three years of creditor talks this month with a debt reorganization agreement that paves the way to an initial share sale.
“Garuda is preparing the final documentation of its debt restructuring with European credit agencies and it’s expected the final agreement will be very soon,” spokesman Pujobroto said in an e-mailed response to questions from Bloomberg News.
The airline plans to extend the maturities on some outstanding liabilities to 2016, he said, without elaborating.
Garuda, which resumed flights to Europe for the first time in six years last month after the European Union eased a ban on Indonesian airlines, is reorganizing its debt ahead of a $300 million initial public offering planned by the end of September. Money from the stock sale will help the company add aircraft and expand its route network, Chief Executive Officer Emirsyah Satar said in an interview in February.
European export credit agencies are owed about $325 million in unpaid loans by Jakarta-based Garuda, according to a person familiar with the matter, who asked not to be identified as details are private. The loans helped the airline buy six Airbus SAS A330 aircraft for $1.5 billion in 1995, the person said.
Garuda in January won bondholder permission to restructure $122 million of floating-rate notes and in December agreed with PT Bank Mandiri to convert 967 billion rupiah ($106 million) of debt due to the lender into a 10.61 percent equity stake. In October it restructured $76 million of debt owed to PT Pertamina, Indonesia’s state oil and gas company.
Garuda, voted the world’s most improved airline in a survey of more than 17.9 million travelers by London-based Skytrax, received 1 trillion rupiah from the government in 2006 to help it keep flying and has been negotiating with bondholders since 2007 over notes that weren’t redeemed.
http://www.bloomberg.com/news/2010-07-01/garuda-indonesia-nears-debt-renegotiation-deal-paving-way-for-share-sale.html
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