Indonesia's Garuda says will propose 5-year debt rescheduling to ECA creditors

JAKARTA (XFNews) - Heavily-indebted national airline PT Garuda Indonesia is to propose five-year debt rescheduling on its 519 mln usd debt to creditors under the European Credit Agency (EC) in a meeting later this month, said Garuda president Emirsyah Satar.

"We will present our business plan and, aside from that, ask for debt rescheduling for a period of five years," Satar told XFN-Asia.

He called the debt rescheduling proposal a win-win solution.

In 2001, Garuda signed a USD1.5 bilioln debt-restructuring deal with the ECA and other creditors such as PT Bank Mandiri to extend the payment period to 16 years from 12.

Garuda's annual principal and interest payments amount to some USD110 million.

The airline has had difficulties in meeting its obligations amid tighter competition and rising operational costs on higher fuel prices.

Garuda finance director Alex Maneklaran said that its July operating loss amounted to IDR421 billion, narrower than the 600 billion recorded a year earlier.

The airline posted a net loss of IDR811 billion as of Dec 2004, he said.

Maneklaran expressed his optimism that Garuda will post a profit this year as the holiday season in the second half period should raise the airline's passenger load factor.

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