(8/21/2006)
The Indonesian language Bisnis Indonesia reports that the government has come to the rescue and agreed to cash injections of Rp. 1 trillion (approximately US108.7 million ) for Garuda Indonesia and a Rp. 450 billion (approximately US$ 48.9 million for Merpati Nusantara, to be taken from the 2006 national budget.
"We hope that with these injections Garuda can regain its financial health," expressed Said Didu, Secretary to the Minister of State Owned Enterprises.
Said explained that the cash injection was not tied to current efforts to restructure the US$794.6 million debt owed to the Export Credit Agency. "This cash injection will be supervised closely," added Said, "so there will be no repeated call for more injections."
The Director of Garuda Indonesia, Emirsyah Satar, confirmed that steps are now underway to bring efficiencies to the airlines operation – estimated to reduce costs by 5%-10% in the early stages while other steps to rationalize Garuda’s management and general payroll. The airline will also sell its subsidiary companies, seek strategic partnerships and eventually go public.
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