PT Garuda
Indonesia, the nation’s biggest carrier, and a shareholder may raise as much as
$1.1 billion in the country’s largest initial public offering in more than two
years. Shares will be sold at Rp 750 to Rp 1,100 each, Elisa Lumbantoruan, the
airline’s acting finance director, told reporters in Jakarta today.
 |
Garuda will use its sale proceeds to pay for new planes as it
works to quadruple the size of its low-cost unit to take advantage
of rising travel demand in Asia. (Bloomberg Photo) |
The
offering will comprise 9.36 billion shares, or a 37 percent stake, including
new shares and existing stock being sold by PT Bank Mandiri, Garuda said in a
statement published in Suara Pembaruan newspaper today.
“This IPO
will help Garuda become more efficient in competing in the global market,”
Hadiyanto, the airline’s president commissioner, said at the press briefing
today.
Garuda will
use its sale proceeds to pay for new planes as it works to quadruple the size
of its low-cost unit to take advantage of rising travel demand in Asia.
The carrier
last month concluded a debt-restructuring agreement to pave the way for the
share sale, likely to be Indonesia’s largest since PT Adaro Energy raised 12.3
trillion rupiah ($1.4 billion) in 2008.
Garuda will
spend $1.3 billion on capital expenditure over the next five years, of which
about 80 percent will be for planes, Lumbantoruan said.
The airline
has a fleet of 87 planes, which will climb to 153 planes, including the
low-cost units, by the end of 2014, he said.
The
low-cost unit’s fleet will rise to 25 planes from six, President Director
Emirsyah Satar said today at the press conference. He didn’t give a timeframe.
Outperformance
Companies
raised 30.6 trillion rupiah in IPOs in Indonesia last year, according to data
compiled by Bloomberg.
That was
almost an eight-fold increase from a year earlier.
The
benchmark stock index has risen 34 percent in the past year, outperforming a
9.3 percent gain for the MSCI Asia Pacific Index.
Garuda has
hired PT Bahana Securities, PT Danareksa Sekuritas and PT Mandiri Sekuritas to
oversee the share sale, Garuda said in the statement.
The public
offering is scheduled for Feb. 2, 4 and 7 and trading will begin Feb. 11, it
said.
Garuda in
December signed final debt agreements with European export credit agencies
including Compagnie Française d’Assurance pour le Commerce Extérieur and Germany’s
Euler Hermes, which were owed about $288 million in unpaid loans.
The accords
extended maturities to mid-2016, with payments to be made in installments of
between $45 million to $60 million a year, Satar said at the time.
Bloomberg
