Indonesia’s flag carrier PT Garuda Indonesia confirmed it is taking steps to restructure its debt and revamp its business in order to stay afloat amid the pandemic, Bloomberg News reported. The airline is negotiating terms with plane lessors and is talking with banks and business partners to restructure its loans, according to a stock exchange filing submitted late Thursday. The coronavirus outbreak has forced dozens of airlines and other aviation businesses to restructure or seek bankruptcy protection.
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PT Garuda Indonesia needs to completely restructure its business, potentially reducing the number of planes it operates to less than half its main fleet as the airline seeks to survive the crisis wrought by the pandemic, its president told staff last week, Bloomberg News reported. “We have to go through a comprehensive restructuring, a total one,” President Director Irfan Setiaputra said in an address to staff on May 19, according to a recording heard by Bloomberg.
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Indonesia's exports racked up their strongest rise in 11 years in April, boosted by a surge in prices of key commodities such as palm oil and copper, though the unexpectedly robust figure is not expected to change the central bank's policy settings, Reuters reported. The resource-rich nation's shipments rose 51.94% on a yearly basis to $18.48 billion, marking the sharpest increase since 2010 and beating a forecast 41% rise in a Reuters poll. The export value was the highest since August 2011.
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Indonesia’s biggest listed clothing firm Sri Rejeki Isman has appointed Helios Capital and Assegaf Hamzah & Partners to represent the company in its debt restructuring process, Bloomberg News reported. The company, known as Sritex, has been trying to extend a dollar loan’s maturity by two years to January 2024. The loan was announced in 2019 and had a deal size of $350 million, according to data compiled by Bloomberg.
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PT MNC Investama, an Indonesian media and property conglomerate that has a tie-up with former President Donald Trump’s company, said it received court approval for its debt plan after agreeing to lower its standalone borrowings by 65%, Bloomberg News reported. The approval by the High Court of Singapore paves the way for the company founded by tycoon Hary Tanoesoedibjo to issue new notes and shares for investors of its distressed bonds as it restructures its debt. Under the agreement, MNC Investama will cap its debt at $81 million, it said.
The economic crisis brought about by the COVID-19 outbreak has hit state-owned enterprises (SOEs) in the energy, transportation and infrastructure sectors, a top government official has said, The Jakarta Post reported. Deputy SOEs Minister Kartika “Tiko” Wirjoatmodjo said SOEs in the energy sector, such as electricity giant PLN and oil and gas company Pertamina, had suffered severe losses amid low demand during the health crisis.
The head of Indonesia’s flag carrier said better terms on aircraft loans will help it avoid falling into bankruptcy as the nation grapples with surging coronavirus cases, Bloomberg News reported. “We discussed the risks, the benefits, the pluses and minuses and the company’s leadership decided against it,” PT Garuda Indonesia President Director Irfan Setiaputra said when asked in a Sept. 18 interview about considering bankruptcy proceedings.
Foreign investors are unlikely to rush back into Indonesian markets until either it pays more for its debt or gives hard evidence it will not push the central bank into longer-term monetary financing of public borrowing, fund managers say, Reuters reported. External demand for government debt in Southeast Asia’s largest economy, normally prized for 7% yields that are increasingly rare even in the world’s emerging markets, has slumped since March with foreign holdings hitting a decade-low in August.
Fitch Ratings has downgraded Indonesia-based developer PT Modernland Realty Tbk's (MDLN) Long-Term Issuer Default Rating (IDR) to 'C' from 'CC,’ Fitch Ratings reported. Fitch has also downgraded the rating on the USD150 million notes due 2021 and USD240 million notes due 2024 issued by its wholly owned subsidiaries, JGC Ventures Pte. Ltd. and Modernland Overseas Pte Ltd, respectively, and guaranteed by MDLN, to 'C' from 'CC'. The Recovery Rating on the notes remains at 'RR4'.
Indonesia’s second-largest lender by assets says the nation’s companies are set to demand more loans, as they scoop up assets made cheaper by the pandemic, Bloomberg News reported. Some buyers are interested in assets that have become available after the virus and measures to stem it hurt Indonesia’s economy, Alexandra Askandar, corporate banking director at PT Bank Mandiri, said in an interview last week. Growth in loans to large businesses will likely accelerate in the second half from an expansion of 3.4% in the first six months, she said, declining to give an exact target.