Garuda receives down payment in F-28 plane deal

Garuda receives down payment in F-28 plane deal

JAKARTA (JP): A finance executive of Garuda Indonesia, the national flag carrier, said Saturday that the airline had already received a down-payment from a group of private firms for the controversial sales of its eight idle F-28 aircraft.

Yazid Adam, Garuda's finance director, said that the buyers of the aircraft have paid a down payment which will eventually enable them to lease the aging aircraft to Merpati Nusantara Airline, Garuda's subsidiary, reported Antara.

Yazid declined to mention the amount of the down-payment. He cited, however, that each of the F-28 will be sold for US$2.7 million.

He also refused to elaborate as to what percentage of the total payment the down payment reached.

"I can only say that the deal will be conducted by the books and Garuda will receive cash payment," he said.

Garuda, which has been reported to incur a significant debt, is expected to carry out financial restructuring, which could lead to a public offering of part of its common shares to the public in the near future.

Yazid also said the group of buyers was coordinated by a private firm called PT Artha Nusa, reportedly controlled by Indra Bakrie of the Bakrie Group and banker Robbie Djohan.

Previous reports have said that no lease agreement between Merpati and those buyers have been met.

Merpati's president, Ridwan Fatarudin, said this month that his airline can only afford to lease the eight F-28s for a period of five years with a rental fee of $60,000 each per month.

Yazid did not mention the members of the buyers' group, but a Merpati executive said that the group also includes KFS Aviation Incorporated of Japan and PT Sakanusa Dirgantara.

Puzzling

The deal for the eight F-28s deal has been deemed as "improper" by various parties, including those at the House of Representatives.

In addition, a senior official of the Ministry of Finance, who is responsible for financial affairs in state firms, said last week that he was not sufficiently informed about the three-way deal involving Garuda, Merpati and the group of buyers.

Ridwan also expressed being puzzled by the leasing offer from the group of private firms because his company had previously offered to buy the aircraft from Garuda but the latter airline had never replied its bid.

Aside from this puzzling F-28 deal, Garuda is also in the middle of negotiations for another controversial deal over the sale of its nine idle Airbus A300-B4 to a private domestic buyer who will then lease some of them back to Garuda and some others to Merpati.

Minister of Transportation Haryanto Dhanutirto has said that each of the Airbus A300-B4s would cost between $9 million and $11 million.

While Garuda is in the process of selling its old aircraft, the government installed, on Friday, Supandi as the airline's new president replacing Wage Mulyono.

Wage was reported to have resigned from his post due to "excessive interventions from the Ministry of Transportation."

Haryanto said during the installment ceremony that there was nothing controversial in the change of Garuda's line-up. (hdj)