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Indonesia govt hopes ECA will offer 'haircut' in Garuda debt restructuring

Jakarta (XFNews-ASIA) - The government is hoping that the European credit agency (ECA) will offer a debt "haircut" as part of a scheme to restructure 500 mln usd that is still owed to the agency by PT Garunda Indonesia, State Enterprises Minister Sugiharto said.


Garuda and ECA are still in negotiations over debt restructuring options.

"It should be settled in a business-to-business arrangement. I understand that Garuda met with ECA two weeks ago and they will meet again in September," Sugiharto told reporters.

"We hope that there will be a rescheduling and even a waiver of interest payment," he said.

Garuda's total debt amounts to 794.6 mln usd. The carrier has been facing difficulties in paying debt instalments of some 100 mln usd a year amid increasing competition. Last December, the airline defaulted on a 56 mln usd debt payment.

"I hope there will a constructive solution to the debt problem. And I want creditors to share the pain," Sugiharto added.