Indonesian govt plans to inject capital into state companies to cope with pandemic

JAKARTA (Reuters) – The Indonesian government is listing state-owned companies hit hard by the coronavirus pandemic that will receive government support, which may include airline Garuda, a finance ministry official said on Wednesday.

The list would be brought to President Joko Widodo for approval shortly, Febrio Kacaribu, who heads the ministry’s fiscal policy office, said in an online news conference.

State companies on the list would receive capital injections or some form of compensation to help with their financial woes, Kacaribu said, adding they include companies that are important for the economy.

Such support to state companies would be executed as soon as this quarter, although the government may also provide assistance later in the year, Kacaribu said.

“Some state companies need our treatment right now, but we must wait for a clear design that will be discussed at a cabinet meeting,” he said. He did not say when the meeting is expected to occur.

He noted Garuda may be one of the recipient of state support.

Deputy minister of state owned enterprises Kartika Wirjoatmodjo previously said the government had not considered a capital injection for Garuda, which is planning to restructure $500 million Islamic bonds due to mature next month.

Garuda is among companies which have said its operations were badly hit by the pandemic, due to a plunge in the number of passengers.

Kacaribu also hinted at support for power utility Perusahaan Listrik Negara, saying demand for electricity has dropped during the pandemic.

(Reporting by Tabita Diela and Gayatri Suroyo; Editing by Kim Coghill)