MERPATI NEEDS RP799.8 BILLION FOR DEBT RESTRUCTURING, OPERATIONS

Jakarta, April 29 (ANTARA) - PT Merpati Nusantara Airlines (MNA) needs Rp799.8 billion this year for its debt restructuring and company operations, its finance director, Robby Quento, said.

"The funds needed reach Rp489.6 billion in the form of new debts and Rp310 billion for operational purposes and fleet procurement," he said at a hearing with House of Representatives Commission VI here on Thursday.

Robby said Merpati's total debt restructuring reached Rp3.14 trillion consisting of old debts recorded at Rp2.65 trillion.

He said new debts are expected to come this year totalling Rp489.8 billion.

"We are proposing seeking loans. Besides from PPA it may also come from other sources. Bank lending seems to be still difficult to get because the conditions are not yet bankable," he said.

He said one of the main factors worsening Merpati's financial performance in the past few years was the amount of the debts and their big interests.

"The debt restructuring has to be done through a settlement scheme which is not too burdening but could give certainty with regard to their payments to creditors," he said.

He said total Merpati's debts were recorded at Rp3.14 trillion consisting of mandatory debts reaching Rp476.75 billion, collateralized debts Rp762.74 billion and non-collateralized debts Rp1.87 trillion.

Robby said of the Rp310 billion needed Rp222 billion would be used to cover the cash deficit, pay the cost of moving the office to Makassar and fund the development of information technology system.

The company also needs to add more aircraft with seat capacity below 50.

He said the company would procure 15 units of MA-6 from Xian Aircraft from China, 11 units of SAAB 340B Plus from Sweden and seven ATR 72 from France.

The secretary of the ministry of state enterprises, Said Didu, said in July 2010 15 MS-60s are expected to arrive in the country while the SAAB 340B Plus is expected to start operating in October 2010.

The procurement of the aircraft will be financed through a leasing scheme.
Said Didu said with the restructuring the management projected Merpati's net profit in 2010 would be minus Rp27 billion and in 2011 rising to Rp11 billion, Rp61 billion in 2010, Rp70 billion in 2013 and Rp209 billion in 2014.

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