Merpati to Propose Deferred Repayment of Its Debts

Jakarta (Antara) - Cash-strapped carrier, Merpati Nusantara Airlines will soon submit a proposal to the commercial court for deferred repayment of its debts totaling Rp2 trillion to around 100 private and individual creditors. "The proposal will be submitted this week. This is part of the steps to rescue Merpati," State Enterprises Minister, Dahlan Iskan, said after receiving Merpati president director, Asep Ekanugraha, and his predecessor Rudy here, Monday. By deferring the repayment of its debts, Merpati could hopefully describe the settlement of its debts in details, he said. Merpati could also come up with a rescue plan to submit to the government that included restructuring of its debts, quasi reorganization and joint operation cooperation, he said. "The settlement through the deferred repayment of debts will be done along with proposed settlement of debts to state-owned companies under a debt-to-equity swap," he said. Merpati suspended all flight routes in early February as it could not afford to cover its operating costs. The airline company, which was set up on September 6, 1962, is heavily in debt, although the government has on several occasions injected funds to it as part of its restructuring efforts. Merpati's debts have currently reached Rp7.9 trillion. (*) Reporting by Royke Sinaga