👟 Walk the Talk: Garuda Indonesia
Acrostics Asia was two months ahead of the official announcement that Indonesia was lining up a capital infusion for the flag airline via sovereign fund Danantara.
Garuda Indonesia was one of the best performers in Asia’s high-yield bond space this year, with the flag carrier’s USD 624.2 million 6.5% notes due 2031 soaring around 25 points to 90 cents.
Acrostics Asia reported as early as April 2025 – two months before the formal announcement – that Indonesian officials were discussing a potential capital infusion for Garuda via sovereign fund Danantara.
Acrostics Asia also connected the financial, legal, operational and political dots to accurately map the airline’s trajectory throughout the year.
Key Timeline
Acrostics Asia reported that even after three rounds of debt restructurings, Garuda still needed state support to remain airborne.
Acrostics Asia also flagged that the national carrier was struggling to meet the required aircraft maintenance expenses and had to ground some planes due to a shortage of components.
Acrostics Asia wrote that Garuda must plug its negative equity – which widened to USD 1.4 billion as of end-March – without tripping up its local in-court restructuring (PKPU) agreement.
Mainstream media reported that Garuda had grounded at least 15 jets because it was struggling to make maintenance payments.
Danantara announced at a press conference that it would give a USD 405 million shareholder loan to Garuda as part of an overall funding package of around USD 1 billion. The news drove a rally in Garuda’s offshore bonds.
Acrostics Asia wrote that President Prabowo Subianto has ordered a mission to save Garuda and the SOE battalion led by Danantara would have to comply.
Acrostics Asia unpacked Garuda’s results to show that it was squeezed from all sides by aircraft leases and maintenance. Negative equity also expanded to USD 1.5 billion as of end-June.
Garuda said it will conduct a USD 1.85 billion private placement, consisting of a USD 1.44 billion cash injection from Danantara and a conversion of the fund’s USD 405 million shareholder loan into equity.
Garuda reshuffled its management to get its rank and file in line, while stabilizing its finances and operations.
Acrostics Asia wrote that Garuda is cleaning up its balance sheet by writing off aircraft assets that constitute more than 50% of its total net worth.
Acrostics Asia noted that Danantara had cut its capital injection by USD 400 million to USD 1.4 billion.
The use of proceeds will also shift from a fleet expansion towards paying the fuel debt owed by Garuda’s budget unit Citilink to state-owned energy company Pertamina.
Acrostics Asia flagged that Garuda’s move to hand out stakes in return for support from fellow SOEs may limit the room for the airline to obtain equity financing from third parties.
Full Acrostics Asia Coverage
📚 Acrostics Anatomy: Garuda Indonesia’s Clipped Wings (24 April - 16 June 2025)
📚 Acrostics Anatomy: Indonesia’s Mission to Save Garuda (27 June - 30 September 2025)
📚 Acrostics Anatomy: Garuda Indonesia’s Clean Up Operation (8 October - 21 November 2025)
🔮 Indonesian SOEs 2026 Outlook: Garuda Indonesia (20-25 November 2025)