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Garuda Indonesia files for Chapter 15 US bankruptcy procedure, says CEO

THE STAR – Flag carrier Garuda Indonesia has requested that a court in New York recognise the airline’s recent debt restructuring deal in a Jakarta court, under Chapter 15 of the United States (US) Bankruptcy Code, its chief executive said yesterday.

Garuda filed the Chapter 15 case late last week at a New York bankruptcy court, CEO Irfan Setiaputra told Reuters.

Chapter 15 provides for cooperation between US and foreign courts, if there is a US financial interest in proceedings.

Garuda and its creditors agreed to halve its debt to about USD5 billion in a deal overseen by a bankruptcy court in Jakarta in June.

However, the carrier’s restructuring agreement is currently being challenged in the country’s Supreme Court by an Ireland-based aircraft lessor, Greylag Goose Leasing and no decision has been made so far.

The lessor has previously objected to the calculation of their claims at around INR2.3 trillion (USD152.07 million) in the restructuring agreement.

In a parliamentary hearing yesterday, finance ministry senior official Rionald Silaban said one of Garuda’s lessors Boeing had yet to participate in the restructuring plan, but said the US planemaker “will eventually participate”. Claims from Boeing to Garuda are estimated at USD822 million.

A Garuda Indonesia Airbus A330 lands at Sultan Iskandar Muda International Airport in Blang Bintang, Aceh. PHOTO: AFP

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