GARUDA INDONESIA CREDITOR CLAIMS REACH $13.8BN

PT Garuda Indonesia has received 470 creditor claims totalling 198 trillion rupiah ($13.8 billion) as part of its court-supervised debt restructuring process the airline entered into in December. Garuda plans to reduce its liabilities by more than 60% to $3.7bn. The airline is attempting to extend the maturity of its dollar sukuk, which matures next year, by 10 years. The indicated price of the sukuk recently fell to record lows under 23 cents on the dollar, according to a Bloomberg report.

Last week was the deadline for final claims from out-of-pocket Garuda Indonesia creditors. All up, 470 creditors put in claims totaling $13.8 billion in a scramble for cash as the airline tries to cut its crippling debt load.

Garuda Indonesia says it has debts of $9.8 billion. The four billion dollar difference isn't peanuts, and the airline's administrators will work through the claims and verify them over the next couple of weeks.

Hot on the heels of this news was confirmation from billionaire Indonesian businessman Chairul Tanjung that he would increase his investment in Garuda Indonesia after the airline finalizes its court-led debt restructuring.

Mr Tanjung already owns a 28.3% stake in Garuda Indonesia and is the airline's biggest shareholder after the Indonesian Government, which retains a 60.54% stake.

Meanwhile, a long-simmering graft scandal regarding the lease of ATR 72-600 aircraft resurfaced this week after Indonesia's State-Owned Enterprises Minister, Erick Thohir, handed over audit documents he said indicated some unconventional financial dealings.

There was little Garuda Indonesia CEO Irfan Setiaputra could do but grit his teeth and support any investigation. Like a high-stakes soap opera, the dramas at Garuda Indonesia show no signs of abating.