Garuda won bondholder permission

PT Garuda Indonesia, won bondholder permission for a debt restructuring that helps paves the way for an initial public offering to fund fleet expansion and acquisitions.

Investors meeting in Singapore approved Garuda plan to buy back $122 million of bonds for as much as 70 cents on the dollar. Garuda will also seek to buy US$16 million of notes.

Garuda, which aims to double its fleet to 103 planes by 2013, acquire local rivals and fly to new destinations in Japan, South Korea and Europe, has said it will raise as much as $400
million from a share sale delayed since 1998.

The airline received a 1 trillion rupiah capital injection from the government in 2006 to help it keep flying and has been negotiating with investors over bonds that weren't redeemed at
their due date in 2007.

The carrier struck an agreement with PT Bank Mandiri Dec. 30 to convert the banks IDR 967 billion of debt into a 10.61 percent equity stake. In October it restructured $76 million of
debt owed to PT Pertamina, Indonesia's state oil and gas company.

Garuda will seek to buy back its bonds through a so-called Dutch auction. In a Dutch auction the lowest price necessary to buy or sell an entire offering within a range set by the company becomes the one at which the deal is completed.

Garuda is being advised on its restructuring by NM Rothschild & Sons Ltd., K&L Gates LLP and Wiriadinata & Saleh.