REPUBLIKA.CO.ID, JAKARTA -- PT Garuda Indonesia expects to save up to 17 percent through hedging in cooperation with several banks including Bank Internasional Indonesia Maybank, Bank Mega, ANZ Indonesia, Standard Chartered Bank Indonesia, and BNI.
"It expects to save 15 to 17 percent to anticipate currency uncertainty," President Director Arif Wibowo stated while inking the hedging agreement here on Tuesday.
He noted that the cooperation would be carried out through cross currency swap worth Rp1 trillion comprising Rp300 billion with Bank Mega, Rp400 billion with BII, Rp150 billion with ANZ, and Rp150 billion with Standard Chartered.
"This is the second phase of recovery of Garuda's position in 2015 due to challenges not only related to the currency exchange rate but also economic growth," he pointed out.
He said the decision was taken as a swift measure to generate revenue that Garuda has been able to achieve now and has even grown by 12 percent.
"We are focusing to ensure smooth revenue generation because it would be impossible to conduct refinancing cost restructuring if the revenue generation does not work," he claimed.
Arif admitted that 25 percent of the cost efficiency target in the first quarter of 2015 has been achieved.
He remarked that efficiency has also been achieved, with income from the recently held Garuda Travel Fair, which contributed up to Rp112 billion within three days.
In line with business assumptions, Arif admitted that the rupiah exchange rate was pegged at around Rp13 thousand against the US dollar and the price of fuel oil at US$70 cent a liter for the hedging agreement.
Based on the agreement and deal, he stated that the four banks would pay Garuda's obligations as a bond issuer in rupiah denomination to bond holders as of April 5, 2015, while Garuda would pay all the obligations to the four banks in US dollar denomination on July 5, 2018.
To improve income structure, Arif explained that Garuda would operate to potential markets in China, the Middle East, and Europe along with increasing its flight frequency and routes.
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