OREANDA-NEWS. February 06, 2014. PT Pertamina (Persero) states its stand to serve purchase of Avtur by PT Merpati Nusantara Airlines (MNA) if the transaction is done in cash.
 
Pertamina Corporate Communication Vice President Ali Mundakir said that as of 15 January 2014, Pertamina only served Avtur purchase by Merpati only if the transaction was paid in cash. This is driven by the increasing debt incurred by Merpati for its Avtur purchase from Pertamina, which has reached Rp 165 billion.
 
This method of service has to be taken by Pertamina considering the airline has twice overshot its maximum commitment to maintain its Avtur purchase debt level to Pertamina.
 
Ali explained that Merpati management was initially committed to the maximum debt limit of Rp 100 billion and should it go above the limit, the Avtur purchase would automatically be paid in cash.
 
Considering the importance of flights to eastern Indonesia, while Merpati was still unable to meet its commitment, Pertamina then relaxed the debt limit to Rp 150 billion. However, Merpati's debt for Avtur purchase continued to rise. Hence, the debt limit commitment was again overshot, which showed that there was no improvement in its effort to repay the debt to Pertamina.
 
“Merpati Avtur purchase debt to Pertamina currently has reached Rp 165 billion, so as of 15 January 2014, Pertamina will only serve cash purchase from Merpati. It does not mean that the supply is cut, but Pertamina only serve cash purchase, no longer provide fresh debt for Merpati,” said Ali.