Garuda Indonesia Files US Chapter 15 Bankruptcy Proceedings – CEO

Garuda Indonesia Files US Chapter 15 Bankruptcy Proceedings – CEO

JAKARTA (Reuters) – Indonesia’s Garuda Indonesia has asked a New York court to recognize the airline’s latest debt restructuring deal in a Jakarta court under Chapter 15 of the US bankruptcy code, the chief executive of Garuda Indonesia said on Monday.

CEO Irfan Setiaputra told Reuters that Garuda filed the Chapter 15 lawsuit late last week in a New York bankruptcy court.

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

Garuda and its creditors agreed to halve its debt to about $5 billion in a deal overseen by the Jakarta Bankruptcy Court in June.

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

The lessor had previously objected to calculating its claims of around 2.3 trillion rupees ($152.07 million) in the restructuring agreement.

At a parliamentary hearing on Monday, senior Treasury official Ronald Sellapan said a Boeing (NYSE) company that leases Garuda has not yet participated in the restructuring plan, but said the US aircraft maker would “ultimately participate”.

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

Boeing did not immediately respond to a request for comment.

(1 dollar = 15,125,000 rupees)

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