Latest news with #WamildanTsaniPanjaitan
Business Times
6 days ago
- Business
- Business Times
Garuda said in talks for US$500 million from Indonesia wealth fund
[JAKARTA] Garuda Indonesia is in talks with the country's sovereign wealth fund Danantara about an injection of around US$500 million, according to sources familiar with the matter, as the struggling national carrier looks to turn its business around. An agreement could be reached as soon as June or July and would be part of an initial stage of funding that may be done in two parts to help the carrier right its finances, said the sources, who asked not to be identified because the information is private. Some of the money is planned to go to Garuda's budget carrier Citilink in order to get more than a dozen of its jets back in the air, the sources said. The Indonesian government is also considering moving control of Citilink to state-owned oil giant Pertamina, they said, adding that discussions are fluid and no final decisions have been made. Representatives for Garuda declined to comment on any specific financial assistance that Danantara may provide, and instead referred to a statement made last month, in which the carrier said that 'such corporate action is fully under the authority of the shareholders and related stakeholders'. A representative for Danantara declined to comment. Pertamina said that Indonesia's 'state-owned Enterprises Ministry had an idea once about a merger of Pelita Air and Citilink, but until now, we haven't got more updates', referring to Pertamina's small, privately owned airline. Garuda, which is majority-owned by the state, returned to a net loss last year after two years of profit thanks to the post-Covid travel boom. Its ongoing financial struggles saw the airline appoint a new chief executive officer in Wamildan Tsani Panjaitan in November, who has been on a mission to fix its balance sheet and expand its international network. As at December, Garuda had around US$1.4 billion more in debt than assets, a capital shortfall some analysts have said needs to be closed before the carrier can function normally again as a company and obtain additional external funding. The carrier's situation has drawn the attention of President Prabowo Subianto and, in March, Indonesia's government transferred its 65 per cent stake in Garuda to Danantara as part of Prabowo's sweeping overhaul of how the country runs its state-owned companies. The 76-year-old airline is a major employer and a key mode of transport for Indonesia, a nation that's made up of 17,000 islands over an area spanning the distance from New York to London. BLOOMBERG
Business Times
16-05-2025
- Business
- Business Times
Indonesia's wealth fund in talks to aid flagship airline Garuda
[JAKARTA] Garuda is in talks with Indonesia's sovereign wealth fund Danantara about an injection of capital, people familiar with the matter said, as the nation's flagship airline struggles to right its finances. The talks are preliminary and could change, and details regarding the size of the funds transfer are still being worked out, the people said, asking not to be identified because they're not authorised to speak publicly. Representatives for Garuda and Danantara didn't respond to requests for comment. Garuda, which is majority owned by the state, returned to a net loss last year after two years of profit thanks to the post-Covid travel boom. It appointed a new chief executive officer in Wamildan Tsani Panjaitan in November and has been on a mission to fix its balance sheet and expand its international network. At least 15 of its jets are grounded because it's struggling to make maintenance payments, other people familiar with the matter said earlier this month. Some suppliers are also requesting advance payment for parts and labour due to concerns over Garuda's financial situation, one of those people said. As of December, Garuda had around US$1.4 billion more in debt than assets, a capital shortfall some analysts have said needs to be closed before Garuda can function normally again as a company and obtain additional external funding. 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 The carrier's most recent debt restructuring concluded in December 2022, following a court-approved plan that was ratified in June of that year, which allowed the airline to restructure approximately US$9.6 billion in liabilities. Indonesia's government transferred its 65 per cent stake in Garuda to Danantara in March as part of a sweeping overhaul mandated by President Prabowo Subianto into how the country runs its state companies. The 76-year-old airline is a major employer and a key mode of transport for Indonesia, a nation that's made up of 17,000 islands over an area spanning the distance from New York to London. One reason Garuda is struggling financially now is due to the government's domestic airfare price-cap policy, which is designed to regulate and control the cost of economy-class tickets and ensure affordability for passengers. That makes it harder for airlines in Indonesia to hike fares to boost revenue. BLOOMBERG
