📰 Weekly Roundup (31 March-6 April 2026): Garuda Indonesia | Supreme Courts of Singapore and Indonesia Sign MOU on Cross-Border Insolvency Cooperation
Weekly newsletter
Dear Valued Contacts,
I was away last week so Acrostics Asia’s flows went down. Nevertheless, I kept an eye on some of the key names in Asia credit including Garuda Indonesia, which is closely watched by banks, bondholders, lessors and advisors.
Most of what I wrote last year has proven accurate so far – the divergence is that I thought Indonesian sovereign fund Danantara’s money would have bought Garuda a couple of years at least, but now the oil jump may accelerate the erosion of the flag carrier’s buffer.
These are some excerpts from my take on 25 April 2025 that laid out why a fourth restructuring would be challenging for Garuda:
The difficulty level for a new round of restructuring has increased because Garuda already went through a local in-court restructuring (PKPU) in 2022. The bankruptcies of Sritex and Arpeni Pratama Ocean Line are a cautionary tale for Garuda as it’s unlikely to get another chance if it defaults on its PKPU agreement.
Indonesian coal miner Bumi Resources also attempted a post-PKPU restructuring, but faced a potential holdout given that a Chinese bank’s request to be repaid faster risked upsetting the balance with other creditors. In the end, local conglomerates Salim Group and Bakrie Group swooped in with an equity deal partly to safeguard Bumi’s key mineral assets.
Garuda may struggle to find a white knight like Bumi did because most of its planes are leased and any prospective investor would have to deal with the Indonesian government. The airline is also running out of carrots as it already dangled the promise of a listing on the Indonesia Stock Exchange during its second restructuring.
As a state-controlled airline and publicly listed company, Garuda comes under more scrutiny than Lion Air Group, which is privately owned by Indonesian tycoon Rusdi Kirana and his family.
Lion Air also had to restructure its debt after being hit by the pandemic, but Kirana managed to get lessors to play ball by setting up a new airline, Super Air Jet, and waving the stick of leaving dissenting creditors behind.
Another notable development in the restructuring scene was the MOU signed by the Supreme Courts of Singapore and Indonesia on cross-border insolvency cooperation.
The aim is to improve communication and cooperation in insolvency and restructuring, especially through the appointment of points of liaison, according to their media statement.
“This is helpful, especially for parties trying to coordinate parallel schemes, or run a Singapore-seated restructuring alongside an Indonesian PKPU in an offshore and onshore pairing,” Jo Tay wrote in her LinkedIn post.
“I think we should definitely see these developments alongside the expansion of the Singapore International Commercial Court’s jurisdiction to hear restructuring and insolvency proceedings.”
👣 Asia’s Restructuring Milestones: Southeast Asia’s Mixed Platter
☀️ Bright Spot #9: ASEAN Insolvency Judges and Practitioners Meeting
I’m back on the grid so Acrostics Asia’s flows should resume this week. Have a good week ahead!
Best,
E
Acrostics Asia is an independent Asia credit intelligence provider that takes end-to-end ownership of its signals – from origination to production and distribution.