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Indonesian Aircraft Manufacturer Declared Bankrupt

Indonesian Aircraft Manufacturer Declared Bankrupt
Company Denies Ruling, Says It's Still Operating And Has Current Orders

A commercial court declared Indonesia's state-owned aircraft manufacturer bankrupt Wednesday, saying the company was heavy with debt and on the verge of collapse.

PT Dirgantara/Indonesian Aerospace is facing some serious lawsuits filed by some 6,500 former employees the company terminated in 2003 during a restructuring effort. The group is demanding pension and retirement funds.

The company disputes the ruling... saying since it continues to operate and has orders for aircraft from overseas, it can't be bankrupt. Current orders will sustain it through 2017, the company said.

PT Dirgantara/Indonesian Aerospace designs, develops and manufactures civilian and military regional commuter aircraft, including planes such as the NC212-200 and CN-235-220; and helicopters such as the NBO-105 CB/CBS, NBELL-412 and NAS-332 Super Puma. It also makes parts for Airbus and Boeing.

The company was founded in 1976 by Research and Technology Minister BJ Habibie who later became Indonesia's third president in 1998. At its peak, the company boasted 16,000 employees and was preparing to launch a commuter airline when the Asian Economic Crisis occurred in 1997.

Judge Andiani Nurdin of the commercial court stated the aircraft manufacturer has ignored warnings since 2004 from the Ministry of Manpower since 2004 to pay the required compensation, according to the Jakarta Post.

The court ruled the aircraft manufacturer was millions of dollars in debt and its defense is baseless.

"The document simply shows estimates that are not supported by adequate infrastructure and capital," said another court judge, Heru Pramono.

The manufacturer employs more than 2,000 people and said it would appeal the decision to the Indonesian Supreme Court.


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