Merpati Needs Cash Injection?

(7/20/2002)

Financially troubled Merpati Nusantara Airlines (MZ) is apparently starting to experience a real cash crunch.

The Airline’s recently appointed CEO, Mr. Hotasi Nababan, publicly complained recently about the lack of cash, saying written requests for a cash injection from its owner, the Government of Indonesia, remain unanswered.

Citing US$ 10 million as the amount needed as working capital to keep the airline clicking along, the Airline Executive was unsure if the needed funds would be dropped by the government or obtained via a privatization of the carrier.

MZ has an outstanding debt total of Rp. 1.7 trillion (approximately US$189 million), Rp. 800 billion of which has been restructured.

MZ operates a fleet of 35 aircraft comprised of seven types of aircraft – all with an average age in excess of ten years.