JAKARTA (XFNews -ASIA) - The government will seek approval from creditors of PT Garuda Indonesia to cut the national flag carrier's debt to 274 mln usd from around 794 mln in a debt restructuring plan that will be discussed starting May 19, Transport Minister Hatta Rajasa said.
Rajasa said the restructuring scheme will require creditors to convert up to 30 pct of the airline's debt into equity.
"The remaining Garuda debt should total 274 mln usd," he told reporters last night after government ministers met to discuss the restructuring plan.
He said a steering committee will be formed, consisting of government and Garuda officials, to negotiate with creditors.
The debt restructuring talks are scheduled for May 19 in Singapore and May 21 in London, he said.
At end-2005, Garuda's owed around 794 mln usd, mostly to European export agencies (ECA). Last December, the airline defaulted on a 56 mln usd debt payment.
Garuda has said that ECA creditors previously gave their blessing to a proposal to reschedule debt payments but have yet to decide the terms and conditions.