Latest news with #Danantara
Business Times
3 days ago
- Business
- Business Times
Garuda new 737 plane's higher rent may strain finances further
[JAKARTA] Garuda is paying twice as much to lease its latest Boeing 737 Max jet than it does for the older 737 planes in its fleet, another potential blow to its finances as it tries to return to profitability. The struggling Indonesian airline is paying around US$400,000 per month for the 737 Max 8 it has leased from BOC Aviation, according to people familiar with the matter. The state-owned carrier pays on average US$200,000 a month for its existing older Boeing 737-800 fleet, the people said, asking not to be identified discussing details that are private. BOC Aviation declined to comment. Representatives for Garuda didn't respond to a request for comment. Garuda, which is now owned by Indonesia's sovereign wealth fund Danantara, reported a full year loss in 2024 for the first time since restructuring nearly US$10 billion of debt in 2022. While the new Max 8 offers better fuel economy than the older planes, it's not clear whether the savings would be enough to compensate for the higher leasing costs. Outside of the difference in the age of the airframe, the doubling of the lease cost can in large part be attributed to the discounted rental prices that Garuda managed to get from its lessors during those debt restructuring negotiations. Danantara extended a US$405 million loan to Garuda just days before the airline agreed to lease the additional 737 Max. On Friday, the plane was en-route to Indonesia, according to data from flight tracking website FlightRadar24. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Garuda is already having trouble keeping its existing fleet in the air, with about 10 per cent of its planes grounded as recently as May as it struggled to make maintenance payments. Nearly 16 per cent of revenue in 2024 was for maintenance and repairs, the highest ratio among flag carriers globally, data compiled by Bloomberg show. Garuda could receive US$800 million to US$1.2 billion more from Danantara to assist with payments to maintenance and leasing companies, Bloomberg reported earlier this week, citing people familiar with the matter. Further pressure on the airline may come as it has to take new aircraft after Indonesian President Prabowo Subianto reached a trade deal with US leader Donald Trump that included the purchase of 50 Boeing aircraft. That could force Garuda to agree to a deal under terms it doesn't necessarily favour and with jets it doesn't actually need. Trump announced in a social media post on Tuesday that Indonesia will order 50 aircraft, including 'many' of Boeing's larger 777 planes, without disclosing a buyer. Garuda chief executive officer Wamildan Tsani Panjaitan has previously said he's in talks to buy 50 to 75 Boeing aircraft, including 737 Max and 787-9 Dreamliner models. BLOOMBERG
Business Times
4 days ago
- Business
- Business Times
Trump's trade deal pushes Garuda to learn to love 737 Max again
[JAKARTA] Five months after a Boeing 737 Max aircraft operated by Lion Air crashed into the Java Sea in 2018, Indonesian flag carrier Garuda Indonesia tried to cancel its remaining order for the same model. Now, the country is working to revive that deal as it seeks to forge favourable ties with US President Donald Trump's administration. Trump announced in a social media post on Tuesday (Jul 15) that Indonesia will order 50 aircraft, including 'many' of Boeing's larger 777 planes. While Trump did not disclose a buyer, Garuda chief executive officer Wamildan Tsani Panjaitan had previously said he's in talks to buy 50 to 75 Boeing aircraft, including 737 Max and 787-9 Dreamliner models. The accord points to the intertwined political and economic interests whenever Trump negotiates with foreign leaders. The US President has previously announced aircraft purchases while visiting countries including Qatar, or when he's hammered out trade agreements with the likes of Vietnam or the UK. In Indonesia's case, Trump said he got the deal over the line in direct negotiations with President Prabowo Subianto during a phone call. The dilemma for Boeing is how to restore or expand the existing 49-jet Max order without leaving Garuda in a financial and strategic bind. The airline is already having trouble keeping its existing fleet airworthy, with at least 15 jets grounded as recently as May, as it struggles to make maintenance payments. At the same time, the state-owned carrier, alongside the Danantara sovereign wealth fund that owns Garuda, is under pressure to move quickly with an announcement to please Trump, according to people familiar with the discussions. The airline and Boeing do not yet have an agreement on the models and quantities that would typically be in such an announcement, said the sources, who asked not to be identified discussing private matters. Boeing referred any questions to Garuda. The airline and its owner did not immediately respond to requests for comment. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up On its own, Garuda does not even have the funds to finance the earlier 737 Max agreement, the sources said. That may prompt Danantara to step in by providing some sort of guarantee or a shareholder loan similar to the US$405 million it put forward last month, the sources said. Garuda may receive between US$800 million and US$1.2 billion more from Danantara to assist with payments to maintenance and leasing companies, they added. As a result, any plane deal could be structured as a purchase while the parties discuss financing options with Danantara and lessors for a later stage, the sources said. But given the weighty political implications, Garuda may feel pressure to agree to a deal under terms it does not necessarily favour and with jets it does not actually need, one of the sources said. Trump is known to combine state visits with tariff announcements to flex his deal-making skills. During his tour of the Middle East, he announced an aircraft accord in every country he visited, including a record plane purchase by Qatar Airways. Not all of those transactions are necessarily what they appear to be. Trump has previously announced inaccurate sizes for accords, wrong numbers of purchased jets or has mixed up aircraft types. He's also presented old agreements as new ones. Some deals that were announced during his first term meanwhile, have since fallen through. At this point, Garuda only operates eight older 777-300 aircraft, raising the question of why the airline would want to buy Boeing's yet-to-be-certified successor in large quantities, as Trump has suggested. The earlier 737 Max order still sits on Boeing's books under a special US accounting category for at-risk deals that are not likely to materialise, the sources said. The state-owned carrier sank back into the red in 2024 after an almost US$10 billion debt restructuring failed to revive its fortunes. That performance is in contrast to its peers in the region that are profitable as they benefit from a rebound in travel demand after the pandemic. BLOOMBERG
AU Financial Review
6 days ago
- Business
- AU Financial Review
Keating tapped to advise Indonesian president and $1.37trn fund
Former Labor prime minister Paul Keating has been tapped to become a strategic adviser on East Asia to Indonesian President Prabowo Subianto and join the advisory board of Indonesia's sovereign wealth fund known as Danantara. Prabowo invited Keating to take on the roles in a personal letter delivered by Indonesia's Foreign Minister Sugiono when he visited Australia earlier this year, according to people familiar with the offer but not authorised to speak to the media.
New Straits Times
11-07-2025
- Business
- New Straits Times
Danantara Indonesia to draw down US$3 billion from US$10 billion credit line, sources say
JAKARTA: Indonesian sovereign wealth fund Danantara is likely to draw down US$3 billion initially from a US$10 billion credit line and use it for investments including a chemical plant and co-financings with Qatar's and China's wealth funds, sources said. The credit line, which a source said has been secured from five foreign banks, would become the biggest such loan disbursed in Southeast Asia by private sector banks when fully drawn down. The facility also represents the first private sector funding for Danantara, which was set up in February and given control of more than US$900 billion worth of assets. Daya Anagata Nusantara, better known as Danantara is part of an ambitious plan by President Prabowo Subianto, who swept to power last year by promising to grow the US$1.5 trillion economy at a rate of 8 per cent compared to the current 5 per cent. Danantara did not respond to a request for comment. The two sources, who had direct knowledge of the matter, asked to remain anonymous because they were not authorised to speak to the media. One of the projects the initial drawn down sum will be used for is a roughly US$800 million chlor-alkali and ethylene dichloride plant of petrochemical firm Chandra Asri Pacific, one of the sources said. In June, Danantara and the Indonesia Investment Authority, the country's first sovereign fund, said they might become new investors in the project, which will produce material used in the water treatment, soap, alumina, and nickel industries. Earlier this year, Danantara also signed agreements separately with the Qatar Investment Authority and China Investment Corporation on potential co-investments. It was not immediately clear which projects in these partnerships would be financed by the initial drawn down amount. DBS, HSBC, Natixis SA, Standard Chartered, and United Overseas Bank were appointed this week as the lead arrangers for the US$10 billion facility, one of the sources said, adding they were among 11 foreign banks that submitted proposals. DBS, Natixis and HSBC declined to comment, while the other two banks did not immediately respond to requests for comment. The US$10 billion credit facility will be available for the next three years, the source said, adding that Danantara had no plans to issue bonds at the moment. The facility carries interest rates on par with Indonesian sovereign bond yields, and each bank committed to lend US$1 billion without security and government guarantees, the source said, adding: "Danantara is a sovereign." As a comparison, Indonesia sold in January US$900 million worth of five-year US dollar-denominated bonds with a 5.30 per cent yield. Loan proposals from some other foreign banks were considered but they could not agree on terms as those lenders had asked for a government guarantee, the source said. As lead arrangers, they will typically bring in other banks to fund the remainder of the total facility.
Zawya
11-07-2025
- Business
- Zawya
Danantara Indonesia to draw down $3bln from $10bln credit line, sources say
JAKARTA - Indonesian sovereign wealth fund Danantara is likely to draw down $3 billion initially from a $10 billion credit line and use it for investments including a chemical plant and co-financings with Qatar's and China's wealth funds, sources said. The credit line, which a source said has been secured from five foreign banks, would become the biggest such loan disbursed in Southeast Asia by private sector banks when fully drawn down. The facility also represents the first private sector funding for Danantara, which was set up in February and given control of more than $900 billion worth of assets. Daya Anagata Nusantara - better known as Danantara - is part of an ambitious plan of President Prabowo Subianto who swept to power last year by promising to grow the $1.5 trillion economy at a rate of 8% compared to the current 5%. Danantara did not respond to a request for comment. The two sources, who had direct knowledge of the matter, asked to remain anonymous because they were not authorised to speak to the media. One of the projects the initial drawn down sum will be used for is a roughly $800 million chlor-alkali and ethylene dichloride plant of petrochemical firm Chandra Asri Pacific , one of the sources said. In June, Danantara and the Indonesia Investment Authority, the country's first sovereign fund, said they might become new investors in the project, which will produce material used in the water treatment, soap, alumina, and nickel industries. Earlier this year, Danantara also signed agreements separately with the Qatar Investment Authority and China Investment Corporation on potential co-investments. It was not immediately clear which projects in these partnerships would be financed by the initial drawn down amount. DBS, HSBC, Natixis SA, Standard Chartered and United Overseas Bank were appointed this week as the lead arrangers for the $10 billion facility, one of the sources said, adding they were among 11 foreign banks that submitted proposals. DBS, Natixis and HSBC declined to comment, while the other two banks did not immediately respond to requests for comment. The $10 billion credit facility will be available for the next three years, the source said, adding that Danantara had no plans to issue bonds at the moment. The facility carries interest rates on par with Indonesian sovereign bond yields, and each bank committed to lend $1 billion without security and government guarantees, the source said, adding: "Danantara is a sovereign." As a comparison, Indonesia sold in January $900 million worth of five-year U.S. dollar-denominated bonds with a 5.30% yield. Loan proposals from some other foreign banks were considered but they could not agree on terms as those lenders had asked for a government guarantee, the source said. As lead arrangers, they will typically bring in other banks to fund the remainder of the total facility. (Reporting by Stefanno Sulaiman in Jakarta and Yantoultra Ngui in Singapore; Editing by Gibran Naiyyar Peshimam and Muralikumar Anantharaman)
