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Bloomberg
Indonesia’s flag carrier PT Garuda Indonesia confirmed it is taking steps to restructure its debt and revamp its business in order to stay afloat amid the pandemic.
The airline is negotiating terms with plane lessors and is talking with banks and business partners to restructure its loans, according to a stock exchange filing submitted.
The coronavirus outbreak has forced dozens of airlines and other aviation businesses to restructure or seek bankruptcy protection. For Garuda, failure to execute the restructuring program could result in an abrupt end of the 71-year-old carrier because of negative cashflow and minus $2.9 billion in equity, according to a recording of President Director Irfan Setiaputra’s address to staff.
Garuda shares fell as much as 5% in Jakarta trading, taking their decline to 16%.
“Everything that the company is doing is aimed at
maintaining operational performance and preserving
liquidity that has been significantly impacted by the Covid-19 pandemic,†Garuda said
in the statement, which confirms a recording heard by Bloomberg over the weekend.
As part of the restructuring, Garuda plans to expand its cargo business, increasing its contribution to total operating revenue to 40% from 10% to 15% currently, it said.