Garuda Indonesia has failed to restructure two tranches of debt after the minimum necessary number of creditors failed to attend an auction at which the carrier planned to buy back the debt at a discount.
At an auction that was to be held at Garuda's law firm in Singapore on 15 December, fewer than 75% of note holders and/or their representatives attended, and thus the quorum was not met, says Garuda. The meeting was postponed until 11 January 2010.
Garuda had planned to pay a discounted rate for the debt, and allocated $25 million to buy out holders of $305 million in floating rate notes due 2007, and 366 trillion Indonesian rupiah ($38.8 million) in floating rate notes also due in 2007.
It had planned a "reverse dutch auction" for both tranches. In a reverse dutch auction, there is one buyer and multiple sellers, with the auctioneer raising the price from a low starting point until a bidder agrees to sell at that price.
On 21 October Garuda said it will repay debts of 967 billion Indonesian rupiah to state oil company PT Pertamina over the next seven years.
Garuda is working to restructure its debt in time for an initial public offering it plans to have next year.
Source: Air Transport Intelligence news