The Management of Mandala Airlines has restated their commitment to recommence flight operations following the successful restructuring of the airlines debt, clearing the way for critical discussions with candidate investors and strategic partners that would get the airline back into the air.
The chief director of Mandala, Diono Nurjadi, quoted by the National news agency Antara, said, "We want to start operating again as soon as possible." Diono told the press that a vote taken on February 24, 2011, among the airline's creditors showed a majority of two-third were in favor of plans to covert outstanding debt into equity in the company.
In the next step, Mandala sought and obtained approval for their restructuring plan from the court in Jakarta. The court authorized Mandala to issue "Series C" share with a nominal value of Rp. 2.500 per share for conversion against debts owed by the airlines to its creditors.
While Mandala is known to be actively courting new capital investors, Diono would not reveal to the press the names of any potential stakeholders, while insisting there are several candidates.
The court-appointed administrator to oversee the restructuring, Duma Hutapea, confirmed that with two-third approval of the debt-to-equity swap the legal requirements for majority approval by a quorum for any restructuring plan had been met. From a total of 345 registered creditor who attended the restructuring meeting, 304 voted in favor of the offered settlement put forth by the airline, 37 voted against, 3 abstained and one vote was invalidated.
From a total debt of Rp. 2.366 trillion (US$26.29 million) approximately Rp. 1.7 trillion or 70% of the company's debt would be addressed by the restructuring plan.
Duma told the press he was pleasantly surprised that the charter companies owed money by Mandala accepted the debt-to-equity proposal.
One of the Airlines major creditors, Lufthansa was among the 37 creditors rejecting the share conversion plan, offering a strategic partnership with Mandala as an alternative. Lufthansa is currently owed around Rp. 89 billion (US$9.9 million).
Mandala ceased operations on January 13, 2011, due to severe cash shortages.
Mandala when in operation was one of only a handful of Indonesian air carriers that managed to fulfill stringent safety certification procedures established by the International Air Transport Association (IATA) which qualified Mandala, together with the national airline Garuda, to fly over and into European air space.
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