Flag carrier Garuda Indonesia said it is getting a $1.85-billion equity capital injection from its majority shareholder, sovereign wealth fund Danantara Indonesia.
The asset management arm of Danantara will inject $1.44 billion in cash while $405 million will be in the form of the wealth fund’s loans converted into equity, Garuda said in a disclosure document.
The new equity will aim to improve the carrier’s liquidity, fleet maintenance and fleet expansion, the document said, adding it will also be used to pay off debt on fuel from state energy company Pertamina incurred from 2019 to 2021.
The $1.44 billion cash injection will have to be approved by the company’s shareholders, it said in the disclosure made on Monday.
Garuda Indonesia’s finances have been strained since the COVID-19 pandemic, forcing the airline to undertake a debt restructuring.
Reuters
