JAKARTA (Reuters) – A court overseeing airline Garuda Indonesia’s debt restructuring negotiations on Monday ratified a deal with creditors to repackage more than $9 billion of the carrier’s debt, a court administrator told Reuters.
The deal, which the state-carrier secured after most creditors backed its restructuring proposal on June 17, was due to be ratified last week, but was delayed after objections by two lessors on claims.
Under the deal, most of the creditors will have to take a debt haircut, or write-down, and have the remainder of their debt repackaged into new bonds and shares, while some others will see their loan tenure extended without any haircut.
Like most airlines in the world, Garuda’s revenues were battered by the COVID-19 pandemic, forcing the company to enter a debt restructuring process in December 2021.
(This story corrects to creditors in paragraph 3, not debtors)
(Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Ed Davies)