Indonesia is finalising a US$1 billion (S$1.4 billion) financial bailout plan for its flag carrier to help it stave off a debt default due to COVID 19 forcing it to ground most of its planes.
The rescue plan includes a proposal to restructure PT Garuda Indonesia's US$500 million sukuk due next month and arrange new bridge loans of as much as US$500 million to meet working capital requirements for three to six months, Deputy State-Owned Enterprises Minister Kartika Wirjoatmodjo said.
Garuda will table the sukuk proposal to investors on May 18 that will include an option to extend the maturity of the securities by three years or a staggered repayment, Mr Wirjoatmodjo said.
Last month, the carrier asked bond holders to begin talks with its financial adviser, citing an "extremely challenging environment for airlines" following the virus outbreak.
Garuda and its unit PT Citilink Indonesia secured around US$384 million in loans and credit lines from state lender PT Bank Rakyat Indonesia this month to shore up working capital.