This is the financial condition of Garuda that wants to be saved using the people’s money

KOMPAS.com – Minister of State-Owned Enterprises (BUMN) Erick Thohir together with the Commission VI Working Committee (Panja) of the House of Representatives agreed to save Garuda Indonesia from the brink of bankruptcy.

In the agreement, Commission VI of the DPR RI approved the plan to provide state capital participation (PMN) of the central government’s state budget of IDR 7.5 trillion for Garuda Indonesia in the 2022 fiscal year.

However, the PMN will be disbursed if Garuda reaches a peace agreement with creditors in the PKPU.

As is well known, many creditors have sued Garuda Indonesia in court, because many obligations have not been paid. If an agreement is not reached, Garuda’s status is threatened with bankruptcy and could lead to bankruptcy.

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The mounting debt is dominated by aircraft rental obligations to dozens of leasing companies. In fact, the Ministry of State-Owned Enterprises had mentioned that several aircraft rental contracts were indicated to be corrupt due to the high rental rates compared to other airlines.

Garuda’s financial condition

Quoted from the Information Disclosure of the Indonesia Stock Exchange (IDX), Tuesday (26/4/2022), Garuda Indonesia last reported its financial statements in December 2021 or the third quarter of 2021 financial statements.

In its report, this BUMN suffered a loss of 765 million US dollars in the third quarter of 2021. Garuda continues to record losses throughout 2021.

For example, in the second quarter of 2021, Garuda lost US$516 million, then in the first quarter of 2021 it lost US$385.4 million.

In 2020, Garuda also continues to fall short. Garuda’s losses in a row, namely the first quarter of 2020 amounted to 123.5 million US dollars, the second quarter of 2020 the loss swelled by 599.8 million US dollars, and the third quarter of 2020 it lost 368.4 million US dollars.

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For revenue from aviation services in the third quarter of 2021 (July-September), the details are scheduled passenger revenue of 99.8 million US dollars, cargo revenue of 76.6 million US dollars, non-scheduled flights 18.2 million US dollars, and related revenues. 10.1 million US dollars.

Meanwhile, Garuda’s total debt also continues to increase. As of September 30, 2021, Garuda’s debt was recorded at 9.8 billion US dollars. While its assets amounted to 6.92 billion US dollars.

This means that, when compared to the total debt and assets, Garuda Indonesia’s equity is already minus about 3 billion US dollars.

In other words, even if all of Garuda’s assets were sold, it would not be enough to pay off the total debt that must be borne.

Garuda Indonesia’s loss was recorded as the largest in the last five years. Apart from disrupted operations, this loss was also caused by the company’s increasing debt.

The magnitude of Garuda’s debt is quite astonishing. Garuda is noted to have obligations to more than 800 creditors, of which the largest debt is from aircraft lease contracts.

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PT Garuda Indonesia (Persero) Tbk welcomes the full support provided by the Panja for performance recovery measures that are also aligned with the ongoing PKPU process.

Garuda Indonesia President Director Irfan Setiaputra said this support was a representation of the solidity of the aviation industry ecosystem in Indonesia.

“We are grateful for the support and hard work of all members of the Committee VI of the DPR RI and are committed to implementing the recommendations that have been submitted consistently and continuously,” he said in a written statement.

According to Irfan, the Panja’s support is an important part of the performance restructuring that Garuda is currently optimizing.

He sure thing this will Becomes outlook positive for Garuda Indonesia’s continuous steps to maximize momentum recovery and transformation of future performance which is full this challenge.

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(Author: Muhammad Idris | Editors: Yoga Sukmana, Erlangga Djumena)

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