Garuda to repay $76m debts to Pertamina

National flag carrier Garuda Indonesia said Monday it had just completed the restructuring of US$76 million of debts to state oil and gas company PT Pertamina, in the airline?s latest move to help ease its debt burden, Jakarta Post reported Tuesday.

?[Under the restructuring deal] We will start to pay the debts by installments during the next seven years," Garuda Finance Director Eddy Porwanto told reporters at the state ministry for state enterprises.

According Eddy, the debt originated from the use of jet fuel or avtur provided by Pertamina for Garuda aircraft during the 2004-2006 period, mainly for transporting Indonesian Haj pilgrims to Mecca.

But he did not go into any further details about the deal reached between Garuda and Pertamina.

Basuki Trikora Putra, a Pertamina spokesperson, confirmed the debt restructuring.

?We have signed the debt restructuring agreement. Of course we have a scheme and mechanism on how Garuda will pay the debt in the next seven years,? Basuki told The Jakarta Post on Monday, declining however to give more details.

It was reported Garuda owes Rp 967 billion ($101.5 million) in debts to Pertamina as of June 2009.

Several state companies, such as airline company PT Merpati Nusantara and Elctricity company PT PLN are also indebted to Pertamina, reportedly for debts amounting to Rp 397 Billion and Rp 5.2 Trillion, respectively.

Indonesia?s armed forces also reportedly owed Pertamina Rp 6.9 trillion as per June 2009.

Pertamina is the most profitable state company, contributing about half of the total annual dividend paid by state firms to state coffers each year. (*)