PT Garuda Indonesia, nations flag carrier, may sell shares in its initial public offering at around IDR600-IDR850 each. Garuda Indonesia expects US$500 million from the sale of a 36.5 percent stake in an initial public offering next month.
Citigroup and UBS AG were hired as financial advisers for the sale. State brokerage firm Danareksa Sekuritas, Bahana Securities and Mandiri Sekuritas will also help arrange the sale.
Proceeds from the IPO willgo toward financingfurther expansion, such as purchasing new planes, adding destinations and improving maintenance standards. Garuda plans to add new routes, including to India, and it also wants to increase its fleetfrom 84 planes to 120 by 2014.
Garuda posted a nine-month profit of Rp 194 billion, far below its full-year profit target of Rp 1.15 trillion, with its unpreparedness for expansion cited as the cause.
Garuda purchased 24 next-generation aircraft last year. The company also concluded a $288 million debt restructuring plan with its creditors in Europe last year.
The European Export Credit Agency agreed to extend the maturities of Garuda loans to 2016, and the agency agreed to be repaid in yearly installments.
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