ASEAN KEY DESTINATIONS
Indonesia AirAsia to convert debt into preference shares
Indonesia AirAsia shareholders have agreed to convert the low-cost carrier's debt into preference shares to improve the company's financial situation, and bring it out of negative equity.
According to Indonesia AirAsia president director Sunu Widyatmoko, the company has no financial issues. Its operational capital is in good standing.
"Currently our operational activities are normal. The negative equity position has not affected our activities, safety standards, or maintenance," said Sunu last week as quoted by kompas.com.
On Monday, Sunu said that the company was still waiting for approval from the Investment Coordinating Board (BKPM).
"Shareholders have agreed [to convert the debt], but it has not yet been executed. We are still waiting for approval from BKPM. So, [to cover] the company's accumulated losses, [we received] loans from [our] shareholders," said Sunu on Monday.
According to Indonesia AirAsia's financial report for the first half of 2015, there was a net loss of Rp 486.35 billion (US$34 million), an increase from last year, which was Rp 340.33 billion.
The financial condition has automatically eroded the carrier's equity. By the end of June, its equity was negative by Rp 4.19 trillion, an increase from last year, which was negative Rp 3.18 trillion.
Meanwhile, the airline received loans for Rp 4.2 trillion. Sunu refused to confirm whether that was the number that would be converted into preference shares.
Previously, Transportation Minister Ignasius Jonan named several airlines that had negative equity.
Besides Indonesia AirAsia, other names mentioned by Ignasius included Cardig Air, Transwisata Prima Aviation, Eastindo Services, Survai Udara Penas, Air Pasifik Utama, Johnlin Air Transport, Asialink Cargo Airlines, Ersa Eastern Aviation, Tri-MG Intra Airlines, Nusantara Buana Air, Manunggal Air Service and Batik Air.
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