Garuda Indonesia has secured a one-year credit facility of $40 million from state-owned Bank Negara Indonesia (BNI).
The conditions stipulated in the collateral-free facility include that Garuda will not be allowed to consolidate or merge its businesses with other companies, pay debts owned by its shareholders or declare itself bankrupt, according to a filing on the Indonesia Stock Exchange.
The facility will also allow the airline to secure funding needed to pay for aircraft leases, and meet its operational needs, including fuel and transportation of hadj pilgrims.
Both the airline and BNI previously signed similar short-term credit facilities in September 2010 and June 2012.
Indonesia's flag carrier also plans to issue around Indonesian rupiah (Rp) 2 trillion ($206 million) worth of bonds during the second quarter of this year. It secured a $70 million collateral-free loan from the Bank Permata in February, and signed a $120 million credit facility in November, which it said, will be used as working capital and to finance new aircraft.