Garuda pays $105.3m in debts, interest<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Despite its financial difficulties, national flag carrier
\nGaruda Indonesia has managed to meet its financial obligations
\nfor 2004 to international creditors.<\/p>\n
Garuda said in a statement recently that it had paid a total
\nof US$105.3 million in debt installment and interest due on Dec.
\n28.<\/p>\n
\"With the payment of the installment, Garuda's total debt and
\ninterest have been reduced to $827.9 million,\" said the carrier.<\/p>\n
Since it signed debt restructuring agreements with its
\ncreditors in November 2001, the airline has paid a total of
\n$454.7 million in installments and interest to creditors, the
\ncompany said.<\/p>\n
Some $627 million of Garuda's remaining debts is owed to an
\ninternational consortium consisting of creditors in the United
\nKingdom, Germany and France. The remaining $200 million is in the
\nform of promissory notes, which are due in 2007.<\/p>\n
Garuda defaulted on more than $1.1 billion in debts to
\ninternational creditors during the Asian financial crisis that
\nstarted in late 1997. Creditors then agreed to extend the payment
\nperiod until 2010.<\/p>\n
Garuda is scheduled to pay $111.1 million of its remaining
\ndebts and interest next year, $112.8 million in 2006, $108
\nmillion in 2007, $120.3 million in 2008, $122.8 million in 2009
\nand $218.7 million in 2010.<\/p>\n
Garuda's operational revenue is estimated to reach Rp 10
\ntrillion ($1.1 billion) in 2004, up from Rp 8.3 trillion in 2003.
\nThe airline's passengers were also projected to rise to about
\neight million from seven million in 2003.<\/p>\n
The airline has several times complained to the government and
\nlawmakers that it had been left behind by its competitors in the
\nregion due to its inability to expand or rejuvenate its fleet
\nbecause of a lack of funds and the limit on new borrowing set by
\nits creditors. Creditors will only allow the firm to borrow a
\ntotal of US$25 million over 10 years.<\/p>\n
Garuda has said that one of the options to boost the airline's
\ncompetitiveness and to avoid financial difficulties such as it
\nexperienced in 1998 was to refinance the airline's debts.<\/p>\n
The Office of the State Minister of State Enterprises is still
\nseeking the best life-saving options for Garuda. The options
\ninclude debt refinancing, a merger with troubled state-owned
\nairline Merpati Nusantara Airlines and debt-into-equity
\nconversion.<\/p>\n
In order to improve its performance next year, Garuda plans to
\nlease at least 12 new airplanes, comprising Boeing 737 New
\nGeneration, Boeing Classic and Airbus A330, for new regional and
\ndomestic routes.<\/p>",
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