Dahlan speaks of ‘last option’ to save Merpati

The Jakarta Post, Jakarta | Business | Tue, April 09 2013, 5:00 PM

State-Owned Enterprises Minister Dahlan Iskan says he will likely make use of a last ditch debt-to-equity swap option in order to save PT Merpati Nusantara Airlines (Merpati) from liquidation. Antara news agency reported.

“Debt-to-equity swap would be the last option to bring Merpati back to business. If it fails, there will be no other way than to liquidate the company,” said Dahlan on Tuesday.

Dahlan said he would still need agreement from the Finance Ministry and the House of Representatives in order to pursue that option.

He acknowledged that some lawmakers had earlier suggested that national carrier Garuda Indonesia take over Merpati’s business.

“Taking over Merpati might be the wrong decision,” Dahlan said.

Echoing Dahlan’s statement was Merpati president director Rudy Setiopurnomo, who believed that Dahlan’s plan would save Merpati, just as it had once saved Garuda.

“Garuda offered an IPO [initial public offering] and then used the money to settle its debts and increase capital,” Rudy said.

Currently, Merpati is reported to have accumulated Rp 6 trillion (US$ 403 billion) of debts to state-owned oil firm PT Pertamina as well as to the state-owned airport management companies of PT Angkasa Pura I, PT Angkasa Pura II and PT Perusahaan Pengelola Aset. (dic)