Merpati struggling to repay its debt<\/p>\n
Debbie A. Lubis, The Jakarta Post, Jakarta<\/p>\n
Faced with continuing financial difficulties, PT Merpati
\nNusantara Airlines plans to issue medium-term notes worth Rp 300
\nbillion to repay its debts, pending government approval.<\/p>\n
Merpati's controller and insurance and tax manager, Setyo
\nWisnubroto, told The Jakarta Post on Wednesday the company
\nsubmitted a proposal on the issuance of the notes to the Office
\nof the State Minister of State Enterprises in January this year,
\nbut had yet to receive a response.<\/p>\n
Merpati's debts to the Indonesian Bank Restructuring Agency
\n(IBRA), totaling Rp 331 billion, will mature on April 11.<\/p>\n
Setyo said the airline had attempted to secure financing from
\nbanks and non-bank financial institutions to repay the debts, but
\nto no avail.<\/p>\n
\"We have no money to repay the debts. So this plan to issue
\nnotes is the only way out. We are still awaiting the approval of
\nthe government,\" he said.<\/p>\n
Officials at the state minister's office were unavailable for
\ncomment.<\/p>\n
Merpati has appointed Mandiri Securities to arrange the
\nissuance of the notes.<\/p>\n
According to Setyo, IBRA promised to grant the airline a
\ngenerous debt haircut of up to Rp 230 billion, provided that
\nMerpati could settle the rest of the debt, or Rp 101 billion, on
\ntime.<\/p>\n
If the company is unable to meet this requirement, the debt
\nrestructuring deal will be canceled and negotiations with IBRA
\nwill begin again.<\/p>\n
Merpati, 93.5 percent owned by the government and 6.5 percent
\nowned by national flag carrier Garuda Indonesia, has been in
\nfinancial difficulties since 1998.<\/p>\n
The airline was forced to take the step of returning three of
\nits 14 locally assembled CN-235 fixed-wing aircraft to state
\naircraft manufacturer PT Dirgantara Indonesia, to settle its
\ndebts with the company.<\/p>\n
In addition, it has grounded its 11 CN-235 aircraft due to
\ndecreasing loads, increased competition and economic woes.<\/p>\n
The company booked a pretax loss of Rp 50 billion last year,
\nup from a pretax loss of Rp 187.9 billion in 2000.<\/p>\n
It booked a pretax profit of Rp 72 billion in 1999, an
\nimprovement from a huge pretax loss of Rp 657.7 billion in 1998.<\/p>\n
The present value of the company's total assets is
\napproximately Rp 900 billion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/merpati-struggling-to-repay-its-debt-1447893297",
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"sponsor": "Okusi Associates",
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