Emirates, Etihad Airways Are Potential Investors for Beleaguered Garuda Indonesia

JAKARTA, KOMPAS.com – Indonesia has offered Dubai’s Emirates and Abu Dhabi’s Etihad Airways to invest in its debt-ridden flag carrier Garuda Indonesia.

This was brought up by State-Owned Enterprises (SOEs) Minister Erick Thohir during a meeting with the House of Representatives Commission VI overseeing SOEs, trade, and industry on Monday, July 4.

“It could be Emirates or Etihad that can be part of our air ecosystem logistics. However, it has yet reached a deal as we just delivered our presentations yesterday,” Erick said.

Erick underscored the importance of having an added value in the strategic partnership between Garuda Indonesia and the investors. Indonesia should not only become a market only.

Also read: Erick Thohir: Indonesia Must Achieve Food Security and Reduce Import Reliance

He hoped that the cooperation with the United Arab Emirates could be an avenue in the distribution of Indonesian products to the Middle East, Africa, and Europe.

Currently, Garuda Indonesia is looking for strategic investors to improve the performance of state-owned airlines. Erick gave assurance that Garuda Indonesia would obtain state capital injections (PMN) of 7.5 trillion Indonesian rupiahs ($499 million). Following that, the government is eyeing cooperation with investors.

“As we previously discussed, the government will first inject 7.5 trillion rupiahs, then we will talk about local or foreign investors. The investor must be a strategic partner so that they will not only provide funds.”

Also read: Indonesian Stock Exchange Halts Trade in Garuda Indonesia Stocks

Erick mentioned that previously many were pessimistic about the corruption case in Garuda Indonesia. Therefore, a policy is needed to carry out negotiations with the lessors. The suspension of Debt Payment Obligations (PKPU) has been approved by creditors that made up 97 percent. This is extraordinary.”

Separately, the company’s president director, Irfan Setiaputra, said that he has no detailed information regarding the potential investors for Garuda Indonesia. He said it is under the purview of the shareholders.

“The State-Owned Enterprises Ministry knows better as the matter is under the purview of the shareholders,” Irfan said on Tuesday, July 5.

State News Antara reported that for the past two years, Garuda Indonesia has been facing a financial storm due to past mismanagement, which caused the company’s debt to swell to more than 140 trillion rupiahs ($9.3 billion).

The SOEs Ministry has taken steps to restructure and save the state-owned airline.

(Writer: Kiki Safitri | Editor: Yoga Sukmana)

Source: https://money.kompas.com/read/2022/07/05/155152126/erick-thohir-sebut-emirates-dan-etihad-jadi-calon-investor-garuda-indonesia.