(7/11/2011)
Bisnis.com says that plans to salvage and restart grounded PT Mandala Airlines may unravel if due diligence tests now being conducted on the airlines shows the company to be non-viable.
According to press reports, the due diligence examination process is nearly half-completed in an eventual deal that would see Indonesia’s Saratoga Capital acquire 51% of Mandala and Tiger Airways 33%.
The corporate secretary of Saratoga Capital, Devin Wirawan, warned that if the financial review determined the airline was financially or ooperationally non-viable, his company would withdraw for the project.
“We must calculate first; this is done via a due diligence study that is half-completed. If it is shown that Mandala is (too) difficult to be salvaged, we will withdraw and not invest,” explained Wirawan.
Devin explained that a decision to withdraw would occur if the due diligence revealed unexpected levels of debts and obligations that would find make establishing a new airline a better option.
Mandala Airlines ceased operations on January 13, 2011.
Wirawan, however, was quick to add: “From the due diligence process, which is 50% completed, show the results are positive. So far, Mandala is fit to retain, we’ve yet to find a major problem. It’s still O.K..”
The due diligence process reviews finances, company infrastructure, management and resources.
Adding another layer of complication to Mandala’s recovery plans are problems that emerged last week surrounding candidate investor Tiger Airways. The Singapore-owned company’s Australian subsidiary was grounded for safety violations, forcing the resignation of the Australian airline’s CEO and a 20% drop in the Tiger Airways stock price.
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