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A Bird of Pay

Garuda Seeking Funding for Fleet Expansion

(4/4/2014) Garuda Indonesia has secured a loan of US$100 million from Bank Internasional Indonesia needed to finance its fleet expansion program.

Quoted by The Jakarta Globe, Garuda’s finance director Handrito Hardjono said, “The loan will be used to expand our fleet.”

Garuda is reportedly looking for an additional US$200 million from other banks in order to complete new aircraft purchases in the pipeline.

In addition, a rights offering scheduled for April should yield US$130 million and the sale of bonds another US$200 million.

All in, Garuda wants to have US$630 million in cash to fuel its fleet expansion that will need between US$300 – US$400 to pay for new planes being delivered in 2014. US$145.6 million of this amount is already addressed in the Airline’s capital expenditure budget.

Also included in these figures are plans to pay off US$200 to $300 million of current debt. Garuda retired US$130 of its debt in 2013.

In an acquisitive mood, Garuda’s CEO Emirsyah Satar, has announced plans for the Airline to increase its stake from 30 to 80% in Angkasa Pura I and Angkasa Pura II – the companies that provide ground-handling services at major airports across Indonesia. The cost of the larger stake in Angkasa Pura is put at US$30 million.