Indonesian State Minister for State Enterprises Sofjan Djalil said on Wednesday that the country will renew the negotiation with China's Xi'an Aircraft Industry (Group) Co., Ltd.

Their talks were halted because the Indonesian state-owned carrier Merpati Nusantara Airlines failed to settle the payment of225 million U.S. dollars for purchasing 15 aircraft from Xi'an Aircraft.

"We are going to re-negotiate the prices, orders and quality guarantees including buy-back guarantees to reach a win-win solution between Merpati and Xi'an Aircraft," Sofjan told reporters on Wednesday.

According to Sofjan, Merpati is facing a big financial problem which may lead to a bankruptcy, and the Assets Management Company under the Indonesian Finance Ministry is likely to take over Merpati and settle the problem.

On June 7, 2006, Merpati signed a contract with Xi'an Aircraft to purchase 15 turboprop Xinzhou Modern Ark MA-60 passenger planes from the Chinese company, using a soft loan facility. To secure the loan, Merpati sought help from the Indonesian Finance Ministry, the State Ministry for State Enterprises and the National Development Planning Board.

But plagued by seemingly endless financial problems, Merpati did not meet the August deadline of paying for the aircraft. Xi'an then sent a letter of demand to Merpati, asking it to follow the contract, pay the bill and take the planes, which have been parking at Xi'an Xianyang International Airport since October.

Source: Xinhua