Mandala Airlines : RI : MDL

Indonesia's Mandala Airlines, which suspended operations today to undergo financial restructuring, is seeking new investors to help it get back on track.

"Over the past few months, Mandala Airlines has been performing at a commercial loss and the situation now is such that we need to restructure the company to pave the way for the entry of new investors," says the carrier's president director Diono Nurjadin in a statement.

The airline plans to apply to Indonesia's Commercial Court for a 45-day window period where it will be temporarily suspended from debt obligations as it works out a business restructuring plan.

"We are confident of attracting new investors to inject additional funds into the airline because, once restructured, Mandala Airlines will be an attractive investment.

There is a huge demand for air travel in Indonesia and the market has lots of space for a well-defined and positioned mid-cost carrier," says Nurjadin, who adds that the suspension of flights is a "necessary move" for the restructuring to
take place.Mandala operates five Airbus A320 family aircraft but reports say the carrier will return these to its lessors these week.

Nurjadin and the airline's spokeswoman could not be contacted for comment.

Tiger Airways to Buy 33% of Mandala

Singapore-listed budget carrier Tiger Airways Holdings Ltd. Friday said it has signed a deal to buy a 33% equity stake in Indonesia's PT Mandala Airlines.

The investment will be held through Tiger's wholly owned subsidiary in Singapore, Roar Aviation Pte. Ltd., it said in a statement to Singapore Exchange, without giving financial details of the deal.

Mandala is undergoing a financial restructuring, after which its largest shareholder will be the Saratoga group, with a 51% stake. The remaining 16% will be held by the previous shareholders and creditors of Mandala, according to the statement.

The next stage of the investment process satisfying certain conditions, including regulatory approvals. The process is expected to be completed in about 90 days, after which flight operations are expected to start, it said.

The restructured airline will adopt the Tiger Airways business model, and plans to offer low-fare travel to international and domestic Indonesian destinations within a five-hour flying radius and operate Airbus A320 aircraft, it added.