Jan 7, 2011

Garuda aims pre-effective IPO next week

Indonesian flag carrier PT Garuda Indonesia expects to obtain pre-effective initial public offering (IPO) from Indonesian capital market regulator (Bapepam-LK) next week.
Garuda Finance Director Elisa Lumbantoruan said the company hopes the IPO will be in line with the schedule.
"We plan the IPO kick-off on January 14 and expect pricing on January 25. The IPO is targeted to raise up to US$500 million," Elisa said.
The IPO proceed will be used by Garuda to buy new fleets and aircraft rejunevation. The airlines plans to have 153 aircrafts by 2014, requiring a US$1.3 billion investment.
Garuda aims to spend US$200 million capital expenditure this year and plans to add nine aircrafts from 87 aircrafts last year.
It also plans to set new routes to new cities such as Osaka and Nagoya, Japan, and Seoul, South Korea. Garuda plans to increase additional new routes domestically as well.
The airlines will dispose 36.5% stake of its enlarged capital of 9.36 billion shares during the IPO. Of the 36.5% stake, about 79% will be new shares and 21% existing shares. Citi and UBS Securities are acting as international bookrunners, while Bahana Securities, Danareksa Sekuritas, and Mandiri Sekuritas are lead underwriter.

Disclosure: No position at the stock mentioned above.  

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