PT Garuda Indonesia Persero Tbk (GIAA) completed the proceeds disbursement process from Mandatory Convertible Bonds (MCB) amounting to Rp1 trillion.

The disbursement of funds from the MCB issuance refers to the MBC issuance agreement between Garuda Indonesia and PT Sarana Multi Infrastruktur (SMI) as the executor of the investment from the Indonesian Ministry of Finance at the end of 2020. The agreement is under the National Economic Recovery (PEN) program.

President Director of Garuda Indonesia, Irfan Setiaputra, said the proceeds from the issuance of MCB amounted to Rp1 trillion. Garuda Indonesia had completed the disbursement process in the middle of the first quarter of this year.

"This, of course, is a momentum for Garuda Indonesia to continue to strengthen its performance recovery efforts in line with the Company's operational fundamentals, which consistently show positive growth," he said in a statement on Tuesday (9/2).

The disbursement of funds resulting from the issuance of MCB has taken into account the company's working capital needs in the short and medium-term, which of course the company does by prioritizing the principle of prudence and the aspect of compliance with the provisions of Good Corporate Governance (GCG). So that the use of the proceeds from MCB can run appropriately accordingly company needs.

As agreed with the relevant stakeholders, in this case, the Ministry of BUMN RI and the Ministry of Finance of the Republic of Indonesia through PT SMI as the executor of the investment, the funds obtained from the issuance of MCB will be used to support liquidity, solvency, and financing the company's operations.

Referring to the MCB issuance approval that the company has obtained with a maximum value of  Rp8.5 trillion and with a maximum tenor of 7 years, according to the MCB issuance agreement's signing of December 2020. Garuda implemented the MCB funds' disbursement on February 4, 2021, amounting to Rp1 trillion with a tenor of 3 years.

Until the beginning of the fourth quarter of 2020, Garuda Indonesia managed to record the highest number of passengers during the pandemic in November 2020.

Garuda Indonesia Group managed to record the number of passengers through the number of passenger transportation of more than 1.043 million passengers, which increased significantly from the early period of the pandemic where the company was only able to carry 30 thousand passengers.

In the cargo transportation business, in November 2020, Garuda Indonesia managed to record a cargo growth of 12.20 percent from the beginning of the fourth quarter of last year to 24.6 thousand tons of cargo transportation.

Garuda also manages the company's production costs. Garuda Indonesia has consistently implemented strategic efforts, one of which is through negotiating aircraft rental costs and negotiating with other third parties. Also, it optimizes additional supporting costs where the monthly savings can reach US$15 million. 

"With the Company's performance that continues to show positive growth in the midst of this pandemic as well as the growing public trust in Garuda Indonesia's flight services, we are optimistic that the proceeds from the issuance of the MCB will be able to support the focus on accelerating the company's performance consistently," said Irfan.