Indonesia's government in Jakarta is finalising a $1 billion bailout for state-controlled Garuda Indonesia. 

The $1 billion rescue plan includes a proposal to restructure Garuda’s $500 million Sukuk due 3 June and arrange new bridge loans of up to $500 million to meet the flag carrier’s working capital requirements for three to six months.

Update : The stat won't intervene in Sukuk repayment.

AKARTA – Indonesia’s Ministry of State-Owned Enterprises is finalizing a loan package worth 8.5 trillion rupiah ($574 million) to help state carrier Garuda ease its tight liquidity as the airline continues to take a hit from travel bans and restrictions due to COVID-19. The details of the loan will be finalized by the end of May at the earliest. 

There are several options for the government assistance, including an equity participation that might dilute other shareholders’ holdings, a convertible bond where the ministry can convert its equity to its stock that might dilute other shareholders’ portions even more, and a subordinate bond. 

Update: The loan has been approved and is expected to be withdrawn by end of 2020.

Update: In October, Garuda announced that the loan will be in the form of seven-year convertible bond underwritten by Indonesia's finance ministry.