Photo: Garuda Indonesia Boeing 737-86N PK-GFK and PK-GFZ at Soekarno-Hatta International Airport in Jakarta on April 13, 2020. Alex Iu Shan/Shutterstock

Islamic Finance

Garuda Indonesia sukuk holders agree to 3-year repayment extension

JAKARTA – Garuda Indonesia has received the nod to extend the repayment period for its sukuk by three years.

Repayment of the $496.8 million global sukuk issued in 2015 was due on June 3, and Garuda would have been in a default situation if repayment, or a new agreement, did not kick in by June 10.

In a virtual meeting on Wednesday (June 10), 90.88% of investors in the sukuk, holding $454,391,000 of the principal amount, voted for the extension.

“We will make another announcement following the Settlement Date, at which date the amended Transaction Documents to give effect to the Proposal will be executed. We also would once again like to thank the Certificate holders for their continuous support throughout these difficult times,” Irfan Setiaputra, Garuda CEO told Salaam Gateway.

The sukuk holders who did not vote today will not be entitled to any consent fee. The holders that have agreed to the extension will receive a cumulative consent fee of up to 125bps.

In May, the Garuda CEO told Salaam Gateway the due date of the global sukuk amid the COVID-19 crisis has pushed the company into a corner as the airline is struggling to maintain its cashflow with a sharp downturn of the number of flights due to COVID-19 travel bans.

The company is carrying a negative cashflow from the first quarter of the year due to a steep fall in revenue and increasing trade payables.

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim

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