Govt to sell Merpati to save the ailing airline

JAKARTA. The government plans to sell state company Merpati Nusantara Airlines to strategic investors to help salvage the ailing airline company, which is burdened by huge debts amounting to Rp 6 trillion.

“Selling its shares to strategic investors has become an option because various efforts to restructure Merpati have not run as well as expected,” State-Owned Enterprises (BUMN) Minister Dahlan Iskan said in Jakarta on Thursday.

Dahlan said that the decision to sell Merpati was made through a leadership meeting of the BUMN Ministry at the Office of the Coordinating Economic Minister in Jakarta on Thursday.

The BUMN Ministry, which is authorized to represent Merpati's shareholders, will accept bids from interested investors and input on how to salvage the ailing airline company, the minister said.

Dahlan explained that the BUMN Ministry had carried out various restructuring programs on Merpati, from a fund injection, reduction in the number of employees and relocation of the company's head office to converting its debts to private creditors into shares.

Besides being heavily in debt to the government, Merpati also owes money to several state companies, including oil company Pertamina and airport management company Angkasa Pura II. (apt)