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Garuda to get $600m rescue via bond sale to Indonesia government

Shareholders approve plan of beefing up state control of struggling airline

A Garuda Indonesia Boeing 737-800 at a maintenance facility at Soekarno-Hatta airport near Jakarta in January. The company will issue bonds to be bought by the government to help it ride out the coronavirus pandemic.   © Reuters

JAKARTA -- Shareholders of Garuda Indonesia, the country's flagship carrier, on Friday approved the issuance of bonds to a maximum amount of 8.5 trillion rupiah ($600 million) in a bid to save the company, badly struggling from the coronavirus pandemic.

The issuance is part of the government's rescue plan for the airline. The bonds will be purchased by the Finance Ministry through Sarana Multi Infrastruktur, a state-owned investment firm for financing and preparing infrastructure projects. The bonds will be mandatory convertible bonds with a tenure of seven years, meaning that after that period, they will be converted to stocks.

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