[JAKARTA] Garuda Indonesia expects to raise as much as US$1.44 billion in cash from the nation’s sovereign wealth fund to put the distressed state-owned carrier on firmer financial footing.
Garuda, which will seek shareholder approval of the plan on Nov 12, seeks to secure the financial help from Danantara Asset Management, an arm of wealth fund Danantara, through a private placement, according to a stock exchange filing. It also reached a deal to convert a US$405 million loan from Danantara, the airline’s majority shareholder, into additional shares, the filing said.
The planned private placement “takes into account the urgency of improving the company’s financial position, and the urgent need for funding to maintain the continuity of the business and operations of the company and its subsidiaries,” according to the filing.
Danantara earlier appointed a new Garuda chief executive officer and finance director. The new management plans to expand its international network and buy as many as 75 Boeing aircraft.
Garuda has struggled financially since the Covid-19 pandemic that effectively halted air travel. Its net loss widened 41 per cent year on year to US$143.7 million in the first half of this year. BLOOMBERG
