Indonesia's Garuda seeks another court extension to verify US$10b claims

[JAKARTA] State-controlled carrier Garuda Indonesia has asked a Jakarta court for another extension to its deadline for its debt restructuring process, its CEO and a curator said, as it has yet to verify over US$10 billion worth of claims.

Garuda is seeking to slash liabilities totaling US$9.8 billion to US$3.7 billion under a court-led process, called PKPU, but creditors, plane lessors and vendors have submitted US$13.8 billion of claims against the struggling flag-carrier.

Garuda wants a 60-day extension time to verify the claims and finalise negotiations with all parties, CEO Irfan Setiaputra told Reuters.

The court had previously granted a 2-month extension for the PKPU on Jan 21.

Garuda made the request on Tuesday (Mar 15) and judges will decide on Mar 21, one of the court-appointed curators for the process, Martin Patrick Nagel told Reuters, adding that some creditors had submitted a similar request.

As of Monday there were claims worth US$9.72 billion by 229 creditors yet to be verified, Nagel said.

So far US$3.26 billion of claims by 248 creditors have been cleared, with US$885.5 million disputed due to differences between the airline and claimants' books, he said, without elaborating.

Claims include US$500 million in Islamic bonds that Garuda defaulted on in June 2021.

Verification was taking time because Garuda did not want to recognise future liabilities, which are under long-term leases, said a source with one of the creditors, who declined to be named as the matter was sensitive.

"Some lessors also submitted future claims to the court and Garuda is unwilling to accept those," the source said, adding Garuda wants to accept only claims as of Dec 9 last year, when it started the debt restructuring process Asked to confirm that, CEO Setiaputra said Garuda was in the process of negotiating.

Garuda has proposed converting part of its debt to equity, offering a debt haircut and new bonds under the restructuring. REUTERS