Garuda on the verge of default (again)
In Dec 2005, Garuda Indonesia defaulted USD55 million payment to creditors. In the next few days, the company should make payments, but the promised Rp500 billion state funds injected has not disbursed yet. With mounts of debts to suppliers (including Pertamina), the flag carrier is on the verge of default again.
Last year, government promised to inject fresh capital of Rp1 trillion (around USD110 million) to Garuda in two tranches Rp500 billion each. The first tranch should have been disbursed November 2006. "But ministry of finance postponed the disbursement upon completion of a new business plan," an internal source at Garuda said.
Garuda has outstanding loan of around USD800 million. Garuda has reportedly not paid fuel purchased from state-owned Pertamina for almost six months.
"Without state funds of Rp500 billion, Garuda is inevitably in trouble from cash flow point of view. I just can't imagine if Garuda defaulted on payments to creditors again and that will push Airbus to pull the leased aircrafts. While the aircrafts are not in operational due to high cost of operations, other leasing agencies would pull out their aircrafts as well," the executive said.
"This administration has a very poor capacity to execute," he described the situation at Garuda and Merpati Nusantara(another ailing state-owned airline).
On the other hand, Peter Sondakh from Rajawali Corporation is aggresively lobbying government officers including Privatization Committee led by Sahala Lumban Gaol to buy Garuda shares.
"We've sent the letter to Privatization Committee on Tuesday, but no answer yet," Rajawali managing director Darjoto Setiawan said to me over the weekend.
Rajawali's competitor is, among others, Texas Pacific Group. None of these investment companies disclosed their partners for the acquisition.
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Last year, government promised to inject fresh capital of Rp1 trillion (around USD110 million) to Garuda in two tranches Rp500 billion each. The first tranch should have been disbursed November 2006. "But ministry of finance postponed the disbursement upon completion of a new business plan," an internal source at Garuda said.
Garuda has outstanding loan of around USD800 million. Garuda has reportedly not paid fuel purchased from state-owned Pertamina for almost six months.
"Without state funds of Rp500 billion, Garuda is inevitably in trouble from cash flow point of view. I just can't imagine if Garuda defaulted on payments to creditors again and that will push Airbus to pull the leased aircrafts. While the aircrafts are not in operational due to high cost of operations, other leasing agencies would pull out their aircrafts as well," the executive said.
"This administration has a very poor capacity to execute," he described the situation at Garuda and Merpati Nusantara(another ailing state-owned airline).
On the other hand, Peter Sondakh from Rajawali Corporation is aggresively lobbying government officers including Privatization Committee led by Sahala Lumban Gaol to buy Garuda shares.
"We've sent the letter to Privatization Committee on Tuesday, but no answer yet," Rajawali managing director Darjoto Setiawan said to me over the weekend.
Rajawali's competitor is, among others, Texas Pacific Group. None of these investment companies disclosed their partners for the acquisition.
Labels: Garuda Indonesia, Privatization
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posted by yosef at 8:35 AM
2 Comments:
interested to know that Peter Sondakh from Rajawali Corporation is aggresively lobbying government officers including Privatization Committee led by Sahala Lumban Gaol to buy Garuda shares?
if the rumors of Peter Sondakh (from Rajawali Corporation is aggressively lobbying government officers) to buy Garuda shares is correct, there is a big possibility that Sondakh just a frontman of Bambang Tri Soeharto Cendana plus some US/Malaysia investors/politicians,
what do you think Ardi?
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