Once Again, Merpati Nusantara Airline Short of Cash and Poised for Possible Financial Collapse

The National News Agency Antara reports that the national flag carrier PT Merpati Nusantara once again sits poised on the verge of bankruptcy if it is unable to secure Rp. 250 billion cash (US$27.8 million) injection before June 2012.

“Earlier I met with the management of Merpati to discuss the company’s condition. If in June, they do not obtain funds of Rp. 250 billion, the company is certain to collapse,” explained the Minister for State-Owned Enterprises, Dahlan Iskan.

According to Dahlan, the airline’s management needs the funds to cover the operating costs of the company.

Merpati was the recipient of additional government funds in the amount of Rp. 561 billion (US$62.3 million) in December 2011, six months later than when those funds were actually needed in June. This forced the airline to borrow short-term funds to continue operations, adding to the airline’s overall debt burden.

“This has made the company experience financial problems and impeded the company’s management from implementing its programs,” said Dahlan

Dahlan described Merpati’s current position as one of “life and death.”

Dahlan was quick to add, however, that all the Merpati managers share a firm resolve to make sure that the airline survives and prospers. Adding, “they want Merpari to keep flying and will all endeavor to restore health to the company’s financial position.”

Dahlan said the state-owned carrier had become overly dependent on government funds, and should be able to secure its own sources of capital.

“I can’t guarantee that the government is prepared to inject more cash from the State budget. Because of that, we give full authority to the management to seek its own funding sources. We don’t care from where, banks or anywhere, what’s important is for Marpati to keep operating,” Dahlan emphasized.

CEO Resigns

Dahlan also used the opportunity to inform the public that the CEO of Merpati, Sardjono Tjitrokusumo, had resigned his post.

“This has (now) become an obstacle for the company. His desire to resign is perhaps because he did not believe he could obtain the Rp. 250 billion,” said Dahlan.

Dahlan said members of the senior management of Merpati were unanimous in their desire that Sardjono remain in his lead management role.

Dahlan said he is now thinking where to find a replacement for Sardjono, but there are no candidates in sight who meet the desired criteria.

“I am also of the opinion that Jhonny (Sardjono) must endure as the head of the corporation. I am uncomfortable if we have to replace the leader,’ said the Minister.

Dahlan closed his comments by saying the main point is that all the employees of Merpati maintain their spirit to rebuild the airline and ensure its survival.

Source:  http://www.balidiscovery.com