Garuda Indonesia's $1.4 Billion Lifeline from Danantara: A Strategic Shift

Garuda Indonesia is set to receive a $1.4 billion capital injection from the asset management unit of Danantara Indonesia, a sovereign wealth fund. This is a reduction from a previous $1.8 billion disclosure. The funds will primarily support fleet maintenance and bolster the low-cost carrier, Citilink.

Garuda Indonesia, the nation's flagship airline, is poised to receive a significant $1.4 billion capital boost from Danantara Indonesia, the asset management arm of the sovereign wealth fund. This figure marks a $400 million reduction from earlier reports.

The latest agreement, detailed in a Tuesday filing, outlines that the injection will be executed via a private placement, translating to around 23.67 trillion rupiah. The funds will bankroll crucial fleet maintenance and increase financial support for Citilink, Garuda's low-cost subsidiary.

Garuda Indonesia, which has faced severe financial strains due to the COVID-19 pandemic, cited a strategic pivot in fund usage, now excluding fleet expansion to concentrate on consolidating existing operations. Danantara Indonesia declined to comment on the new arrangement.

(With inputs from agencies.)