Billionaire Chairul Tanjung-Backed Garuda Indonesia Gets $408 Million Loan From Danantara

Garuda Indonesia received a 6.65 trillion rupiah ($408 million) loan from the country’s sovereign wealth fund, Danantara Indonesia, to help support the turnaround of the cash-strapped flag carrier.

The loan that will be disbursed by Danantara Asset Management is part of a $1 billion financing package that will help support Garuda’s recovery, and fund the maintenance, repair, and overhaul of the airline’s fleet, according to a statement released on Tuesday.

“With the support of Danantara Indonesia, Garuda Indonesia projects the strengthening of operational capabilities through business and performance optimization, so that it can strengthen Garuda Indonesia’s position as a world-class airline,” Wamildan Tsani, president director of Garuda said in the statement.

In a separate filing to the Indonesia Stock Exchange, Garuda said that 4.8 trillion rupiah ($294 million)—over 70% of the loan—will be allocated to Citilink, to support maintenance of the low-cost carrier’s fleet and ensure the planes are operationally ready.

Garuda—which is jointly owned by the government (whose stake has been transferred to Danantara) and billionaire Chairul Tanjung—has struggled with debt and financial problems for years. In 2023, it restructured $10 billion in debt but still needed government support to stay afloat. The airline’s revenue rose 16% to $3.4 billion last year, but it still ended the year with a $69 million net loss, compared with a $252 million net profit the previous year.

The airline, which operated 139 planes and served over 23 million passengers last year, appointed Tsani—a former top executive at rival Lion Air—as its new CEO last November, in an effort to turn around the loss-making company.

Tanjung, who controls the diversified CT Corp., has an estimated net worth of $4.3 billion, according to Forbes’ real-time data. Through his company Trans Airways and a small direct stake, Tanjung holds an 8% combined stake in Garuda. CT Corp. is best known for its credit card business, hypermarkets and TV station ownership. The conglomerate also controls Allo Bank Indonesia, one of the country’s largest digital banks.