Garuda Indonesia (GA, Jakarta Soekarno-Hatta) must now confront a geographical extension of its legal and financial troubles to Australia, where it has been sued for allegedly not keeping up with the lease payments for two of its aircraft.
Two Ireland-based designated activity companies, Greylag Goose Leasing 1410 and Greylag Goose Leasing 1446, which are both managed by New York-based private equity firm Avenue Capital Group, filed a winding up application against the airline at the Supreme Court of New South Wales in Sydney.
Garuda Indonesia revealed in mid-July that it had received cassation appeals from the two lessors against the results of its bankruptcy protection process (Penundaan Kewajiban Pembayaran Utang - PKPU), from which it had emerged the previous month. The leases related to A330-300s PK-GPQ (msn 1410) and PK-GPR (msn 1446), both of which are currently stored at Jakarta Soekarno-Hatta.
The special purpose vehicles’ new lawsuit in Australia was submitted on August 17, and Garuda was notified about it the following day through its branch office in the New South Wales capital city, as the carrier described in a letter, coded GARUDA/JKTDZ/21616/2022, attached to an Indonesia Stock Exchange filing on August 20.
Listed under “Legal Cases Against Issuers or Public Companies that Have a Material Impact,” the letter said that “the winding up (bankruptcy) lawsuit was filed with the Supreme Court of New South Wales, Australia, where in the lawsuit the petitioner stated that the company had not been able to fulfil its obligations related to aircraft rental costs.”
The earlier cassation appeals had been filed in Jakarta despite the fact that “95.07% of total creditors have approved the reconciliation plan proposed by the company,” the letter lamented. The letter was addressed to officials at Indonesia’s Financial Services Authority regulator as well as to the stock exchange.
“There is no direct impact on the company’s operational activities, and the company ensures that all operational activities run normally. The company will respond carefully and wisely, including studying the lawsuit together with its legal consultant in Australia to determine the steps that need to be taken in connection with the winding up lawsuit,” it assured.
As for its ongoing pursuit of a settlement with creditors, Garuda Indonesia said it had “opened a discussion room within the framework of the PKPU process which is part of the company’s efforts [towards] the settlement of its business obligations by taking into account the aspirations of creditors which are also aligned with the company’s capabilities.”
