The Indonesian government has proposed to either inject cash or establish a special team to help flag carrier Garuda Indonesia settle its huge debt load, a senior official said Monday.

The government considers to inject 250 million U.S. dollars for debt restructuring or establishing a "special-purpose vehicle" ( SPV) to takeover Garuda's debts, Minister of State-Owned Enterprises Sugiharto said in an open hearing with legislators here.

Garuda's total debts were mentioned at 664 million dollars.

If the second option was agreed, the SPV would repay debt principal and interest of 80 million dollars annually for a ten- year period, he said.

"The financial sources will be Garuda's plane leasing revenues of 30 million dollars a year and government's fund of 50 million dollars a year," he added.

This option would have more a positive impact on Garuda's financial balance and capital, he claimed.

The minister said fuel price rises and the October 2005 Bali bombing were a double blow to the heavily-indebted state firm.

Source: Xinhua