JAKARTA (Reuters) - PT Garuda Indonesia (GIAA.JK) has secured majority approval to extend the maturity of $500 million sukuk, or Islamic bonds, by three years, Chief Executive Irfan Setiaputra told a virtual news briefing on Friday.
The airline sought to extend the maturity of the debt, originally due on June 3, after its operations took a hit from coronavirus-linked travel restrictions.
Sukuk holders representing more than 90% of the bond value had agreed to the extension as of Friday, he said, but the company is still waiting until June 10 for all holders to vote.
Garuda offered a fee of up to 1.25% to sukuk holders who voted in favour of its proposal before June 1.
“We have put forward a proposal that makes sense in this current situation. Hopefully in three years, conditions will improve and we can execute our obligations,” Setiaputra said.
Travel restrictions have resulted in a 90% drop in passengers volume at Garuda, which posted profit of $6.5 million last year, and forced the company to slash costs and focus its business in cargo and chartered flights, Setiapurtra said.
A presentation document Garuda posted on its website said the company sees potential for a 10% increase in cargo revenue this year.
According to the document, last year Garuda group carried 335,764 tonnes of cargo with a yield of 43.8 cents per tonne per mile.
Reporting by Bernadette Christina Munthe; Writing by Fransiska Nangoy; Editing by Shri Navaratnam and Jan Harvey