Garuda Indonesia files for Chapter 15 U.S. bankruptcy procedure – CEO

JAKARTA (Reuters) – 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 U.S. Bankruptcy Code, its chief executive said on Monday.

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 U.S. and foreign courts, if there is a U.S. financial interest in proceedings.

Garuda and its creditors agreed to halve its debt to about $5 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 2.3 trillion rupiah ($152.07 million) in the restructuring agreement.

In a parliamentary hearing on Monday, finance ministry senior official Rionald Silaban said one of Garuda’s lessors Boeing (NYSE:) had yet to participate in the restructuring plan, but said the U.S. planemaker “will eventually participate”.

Claims from Boeing to Garuda are estimated at $822 million.

Boeing did not immediately respond to request for comment.

($1 = 15,125.0000 rupiah)

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