Indonesia’s Mandala Airlines files for bankruptcy
Jakarta-based Tigerair Mandala has filed for bankruptcy at the Central Jakarta Commercial Court in early December according to a Jakarta Post report.
February 1, 2015
Jakarta-based Tigerair Mandala has filed for bankruptcy at the Central Jakarta Commercial Court in early December according to a Jakarta Post report. The defunct carrier has been unable to service over IDR1.5 trillion (US$120.5 million) and Rp7 billion in debt owed to shareholders and creditors respectively, since it suspended operations in July last year.
The decision to stop operations has caused two potential investors, PT Citi-link Indonesia and PT Indonesia AirAsia, to retreat from their plan to acquire Mandala’s shares. Citilink Indonesia is a subsidiary of state-owned airline company PT Garuda Indonesia, while Indonesia AirAsia is part of Malaysia-based airliner AirAsia Berhad. “We have tried to rise again, but we are not able to face the rising costs of aviation turbine fuel and the depreciation of the rupiah,” the company’s lawyer Zaky Tandjung was quoted as saying.
Mandala, which operates under the name Tigerair Mandala, is 64.2 per cent owned by equity firm Saratoga Capital — which was cofounded by Sandiaga Uno and Edwin Soeryadjaya — along with PT Cardig International and 35.8 per cent by the Singapore-based Tiger Airways Group of which Singapore Airlines (SIA) is a shareholder.
SIA is now in the process of increasing its stake in Tigerair which pending approvals will result in the LCC becoming a subsidiary of the Singapore carrier. SIA which will likely increase its shareholding from 55.8 to 76.1 per cent has said it is not considering taking over Tigerair entirely but rather, will focus on pursuing synergies, particularly with its long-haul LCC subsidiary Scoot.