State Planemaker Dirgantara Indonesia Thrown Rp 2 trillion Lifeline
Indonesia’s government said on Monday that it will inject Rp 2 trillion ($234 million) into state planemaker Dirgantara Indonesia, a partner of Europe’s largest aerospace company EADS, to keep the debt-ridden firm afloat.
Dirgantara produces its own planes and provides subcontractor services to make spare parts for Airbus owner EADS and Boeing, but the firm has undergone major restructuring and slashed more than half its workers since 2004.
Dirgantara is now sitting on an unpaid debt to the government worth Rp 1.1 trillion.
State Enterprises Minister Mustafa Abubakar told the House of Representatives (DPR) the government would use Rp 2 trillion from the 2012 state budget since he said the firm has an important role in the nation’s defence and technology strategy.
EADS executive Jean Pierre Talamoni told Reuters last week that his firm met the Indonesian government and Dirgantara to talk about the restructuring plan and that EADS will play an advisory role in the process.
Talamoni said EADS plans to expand its presence in Indonesia with Dirgantara through a joint venture, which fits Indonesia’s government strategy of seeking to attract foreign direct investment and boosting high value manufacturing industries.