JAKARTA (XFNews) - National flag carrier PT Garuda Indonesia has proposed the government assume some of the airline's debts as among the options aimed at resolving its financial problems, Bisnis Indonesia reported citing a Garuda document.
It said the range of options include the government taking over 661 mln usd in debt and injecting 56 mln in fresh working capital; secondly taking over 505 mln worth of debt and injecting 111 mln usd in new capital; thirdly taking over 505 mln usd in debt without any capital injection and fourthly taking over 269 mln usd in debt, with no capital injection but a government guarantee of the full debt load.
Under a fifth option the government would borrow 269 mln usd on behalf of the airline, inject 56 mln usd in working capital and provide a guarantee to creditors of European credit agencies (ECA), the newspaper said.
It said all five options require the government to provide a guarantee on Garuda's 103 mln usd mandatory convertible bonds held by PT Bank Mandiri.
The report said the government's Financial Sector Policy Committee has already approved this guarantee, allowing Bank Mandiri to upgrade its Garuda loan status from non-performing to current.
The final option would see the government shutting down Garuda, which could cost the state around 827 mln usd, the report said.
It said that as of end of 2005, Garuda's debts consist of 501.6 mln usd to ECA, 130.6 mln in floating rate notes, 12.1 mln to Export Development Canada, 11 mln to PT Bank Negara Indonesia, 2.5 mln to Bank Mandiri under a syndicated loan and another 136.8 mln usd in mandatory convertible bonds.
Earlier this month Garuda vice president Alex Maneklaren said the airline hopes to complete its debt restructuring in June.
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