hope its true, leaving in 11 days.
Quote:
Jakarta (ANTARA News) - The government is considering using the capital reserves of state-owned companies as an alternative way to solve Garuda Indonesia's liquidity problems, a cabinet minister said.
"We are still studying how the capital reserves of state-owned companies can be transferred to Garuda," State Enterprises Minister Sugiharto said after a hearing with the House of Representatives' Commission VI on Wednesday.
The minister said Garuda's current financial condition was not sound as its debt-to-equity ratio was 25 to 1.
In fact, Garuda's liquidity problems had developed into a negative cash flow, he said.
He said the difficulties actually began a few years sgo and were caused by excessive investment or investment that grew out of proportion with return on investment.
It was therefore impossible for the company to grow without recapitalization or fund injection, he said.
Operationally, Garuda was in a negative position because it must spend an average of US$9 million per month on operational expenses, he said.
Meanwhile, Revrizal, a member of the House Commission VI, said the House would politically support any effort to rescue Garuda through recapitalization, provided it could operate more efficiently.
Garuda's funding difficulties came to a head late last year when the national flag carrier failed to repay its debts amounting to US$55 million.
Garuda has debts totalling about US$790 million consisting of US$510 million owed to the European Credit Agency (ECA), US$130 million to its medium-term bond and promissory note holders in Singapore and US$150 million in Bank Mandiri and state airport operators Angkasa Pura I and II.
Garuda is in the process of negotiating with its creditors on possible options for the settlement of its debts.
The Office of the State Enterprises Minister, the Finance Ministry and the House had agreed to restructure Garuda's debts, Sugiharto said.
He said the government would use the investment funds of state labour insurance company PT Jamsostek amounting to Rp31 trillion and the fund surplus of state telecommunication operators totalling billions of rupiahs to solve Garuda;s financial difficulties.
"The Office of the State Enterprises Minister as the shareholder of Jamsostek and Telkom has the authority to do so. But the problem is that we still have to make accurate calculations of the ratings and funding risks involved," he said.