One business day after a group of parliamentarians approved a government plan to inject a further IDR7.5 trillion rupiah (USD520 million) into the capital of Garuda Indonesia (GA, Jakarta Soekarno-Hatta) this year, the distressed carrier said it planned to conduct a rights offering to raise additional cash.

The airline will invite strategic investors to take part in the equity issue, its finance director Prasetio told creditors during a court hearing on April 25. It expects to undertake the move once the Indonesian government provides the fresh funding.

“Our first priority is to partner with local investors before we then expand our search to include international ones,” he said, as quoted by Bloomberg.

Jakarta has hinted that it is open to the idea of private investors becoming majority owners of the airline, which continues talks with creditors to restructure its approximately USD13.7 billion debt pile. For example, Erick Thohir, minister of state-owned enterprises, commented last December that placing Garuda and other aviation and tourism enterprises under holdco Survai Udara Penas was part of a plan to open them up to private investors.

In the creditors’ meeting, Prasetio did not say how much money would be sought in the rights issue or how big a stake new investors may hold. But the airline, he said, plans to use the new injection of state funds to rebuild operations and settle tax debts and obligations to employees.

A group of politicians tasked with deliberating on the government’s strategy to save the airline approved the capital injection on April 22, Arya Sinulingga, an aide to Thohir, told local media, though a broader parliamentary vote may be needed to finalise the decision.

First, however, Garuda must reach a settlement with its creditors. It is set to outline a debt restructuring plan to them on May 10, for them to vote on seven days later. But as of April 25, court-appointed administrators had verified claims from 312 creditors, worth IDR47.5 trillion (USD3.29 billion), leaving IDR150.6 trillion (USD10.44 billion) of claims belonging to 172 creditors - mostly aircraft lessors - yet to be examined, sources told Bloomberg.