DENPASAR ~ National flag carrier Garuda Indonesia has been holding talks with potential strategic partners to help it address its debt problems, the company president said this week.

“We have been informally holding talks with several potential strategic partners, and together with the government, we will formally appoint the partner as soon as possible,” Emirsyah Satar said in a statement.
He did not give further details.

The government previously hinted that it might sell a stake in the state-owned airline as part of efforts to settle the firm’s debt, which totals US$794.6 million.

Satar added that last Friday the firm made three proposals to address the unsecured debt concerns of its floating rate note holders. These included buying the paper back at a discount, rescheduling payments and converting debt to equity.

In September, the government said it planned to inject Rp1 trillion ($109 million) into the struggling carrier, partly from the 2006 revised state budget and the remainder from the following year’s budget.|

Garuda has suffered in the past year from soaring global oil prices, a weakening of the rupiah and rising interest rates.