Garuda Indonesia secures over 90% approval for sukuk extension


  • AseanPlus News
  • Friday, 05 Jun 2020

JAKARTA (Reuters): PT Garuda Indonesia has secured majority approval to extend the maturity of US$500mil sukuk, or Islamic bonds, by three years, Chief Executive Irfan Setiaputra told a virtual news briefing on Friday (June 5).

The airline sought to extend the maturity of the debt, originally due on June 3, after its operations took a hit from coronavirus-linked travel restrictions.

Sukuk holders representing more than 90% of the bond value had agreed to the extension as of Friday, he said, but the company is still waiting until June 10 for all holders to vote.

Garuda offered a fee of up to 1.25% to sukuk holders who voted in favour of its proposal before June 1.

"We have put forward a proposal that makes sense in this current situation. Hopefully in three years, conditions will improve and we can execute our obligations," Setiaputra said.

Travel restrictions have resulted in a 90% drop in passengers volume at Garuda, which posted profit of US$6.5 million last year, and forced the company to slash costs and focus its business in cargo and chartered flights, Setiapurtra said.

A presentation document Garuda posted on its website said the company sees potential for a 10% increase in cargo revenue this year.

According to the document, last year Garuda group carried 335,764 tonnes of cargo with a yield of 43.8 cents per tonne per mile. - Reuters
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Garuda Indonesia , Approval , Sukuk

   

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