A worker walks on a crane as a Garuda Indonesia's aircraft is parked at the Garuda Maintenance Facility (GMF) AeroAsia, at Soekarno-Hatta International airport near Jakarta, Indonesia, January 21, 2022.
A worker walks on a crane as a Garuda Indonesia's aircraft is parked at the Garuda Maintenance Facility (GMF) AeroAsia, at Soekarno-Hatta International airport near Jakarta, Indonesia, January 21, 2022. Reuters / WILLY KURNIAWAN

Garuda Indonesia's proposal for restructuring its more than $9 billion of debt won the approval on Friday from the vast majority of the airline's creditors, officials said, staving off the risk of bankruptcy at the embattled flag carrier.

More than 90% of creditors who attended Friday's vote on the plan at a Jakarta court accepted Garuda's proposal, enough to reach agreement for all who submitted claims, a team of administrators appointed by the court said.

About 142 trillion rupiah ($9.58 billion) in claims against Garuda would be settled by the agreement, which is set to be ratified by a judge on Monday.

Garuda's proposal was for aircraft manufacturers, lessors, maintenance vendors, and Islamic bond investors, which hold the biggest chunk of liabilities, to take a large debt "haircut", or write-down, and to exchange the remaining amount with $825 million of 9-year bonds and $330 million equity.

A financial adviser for Garuda said this scheme would restructure around $5.5 billion to $6 billion of liabilities, while the rest, including loans to banks and state firms, like fuel provider Pertamina and airport operators, would be extended without a cut.

"We are committed to fulfill all our liabilities that we have conveyed in the proposal," a teary-eyed Garuda chief executive, Irfan Setiaputra, told creditors at the court after thanking them for their support.

Those who submitted claims to the court include Britain's Rolls-Royce and European planemaker Airbus and investors of Garuda's $500 million Islamic bonds.

($1 = 14,825.0000 rupiah)