Feb 9, 2011

Garuda IPO's selling agents meet snag

The foreign selling agents arranging initial public offering of PT Garuda Indonesia (Persero) Tbk, UBS and Citigroup, apparently faced difficulties to tap global demand from foreign investors.
A source close to the deal as quoted by Bisnis Indonesia today said the selling agencts are estimated to fill in their order book with US$10 million.
“The foreign investors’ interest is relatively low as they prefer to purchase the stakes of listed airlines companies such as Singapore Airlines and China Airlines,” he said yesterday.
Furthermore, as he added, Garuda’s underwriter such as Danareksa Sekuritas, Mandiri Sekuritas, and Bahana Securities expressed their disappointment over the performance of those two foreign securities merely since they are unable to sell optimally.
Garuda is seeking Rp4.75 trillion from the IPO. The proceed will be derived from the sale of 6.27 billion shares, consisting of 4.4 billion shares of Garuda and 1.9 billion shares of PT Bank Mandiri (Persero) Tbk.
Referring to such figure, the foreign investors apparently only absorbs 1.9% of the total stake offered. This portion is significantly lower than the allocation for the foreign investors, or 20% of the total stake being offered to public.
Managing Director of Citibank Indonesia, Tigor Siahahan when being confirmed through his cellular phone and short message declined to comment. Country Head of UBS Indonesia, Rajiv Louis also refused to confirm.
 
Disclosure: No position at the stock mentioned above.

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