Garuda Indonesia Debt Raised Up to U.S. $ 513 Million

The total amount PT Garuda Indonesia Tbk airlines debt rose up to 7.7% in 2011 or U.S. $ 513 million or IDR 4.6 trillion, from U.S. $ 476 million in 2010. This was stated by the Garuda Finance Director, Elisa Lumbantoruan.

"The debt increase is because there is a loan of U.S. $ 50 million in 2011 from Citibank, UBS, and Indo Exim," he said.

With the huge amount of this debt, said Elisa, PT Garuda Indonesia has allocated U.S. $ 131 million in 2012 budget to pay the mortgage.

Garuda Indonesia and Debt

"We hope that there is no more loan again this year, so that the total debt remains U.S. $ 400 million," she said.

Regarding the funding sources to pay the debt, the company will take IDR 2.5 trillion from operating cash flow, then the remaining funds from the IPO, and new loans. "It is still plan for the new loan, as it should be approved by the AGM meeting," she said.

Meanwhile, according to Garuda Chief Director, Emirsyah Satar, debt is a reasonable thing in business. "The debt is not against the law. Moreover, the debt is used for business development," he said.

Emirsyah stated that it is impossible that there is no debt in developing the business. "It may continue to grow with equity. The most important thing is the company's ability to pay," he said.

Emirsyah tried to illustrate, in 2006 Garuda's revenue reached U.S. $ 1 billion, with the debt of U.S. $ 900 million. But now the income reached IDR 27.1 trillion, the debt is U.S. $ 517 million. "So, there is a balance, it is sustainable," he said.

Related to the Garuda Indonesia performance in 2011, the company posted revenue of IDR 27.1 trillion from IDR 19 trillion in 2010. For 2012, the revenue is expected to increase 21 percent. "We targeted total numbers of passengers up to 22 million people in 2012. Last year, it was 17.1 million people," said Emirsyah.

Source: Detik