Garuda raises cash for 2011 expansion

JAKARTA, 4 January 2011 – Flag carrier Garuda Indonesia plans to raise around US$500 million from its imminent initial public offering, a report said Tuesday, kick starting a year of expansion.

The airline is selling 9.36 billion shares, of which 79% are new, according to a term sheet seen by Dow Jones Newswires.

It will begin roadshows for the deal, which has no overallotment option, on 14 January and aims for a listing in Jakarta on 11 February, the term sheet said.

Once listed, 36.5% of the company will be in public hands.

Citigroup Inc. and UBS AG are the international bookrunners for the IPO, while PT Bahana Securities, PT Danareksa Sekuritas and PT Mandiri Sekuritas are the domestic bookrunners.

The proceeds will go towards capital expenditure, pre-delivery payments and other corporate payments, according to the term sheet.

The carrier made a stunning turnaround after suffering financial troubles six years ago.

It was cleared by European regulators in 2009, two years after all Indonesian airlines were banned from European Union airspace after a series of crashes and incidents which exposed poor safety standards across the country’s aviation industry.

Garuda, which posted a net profit of more than US$100 million in 2009, was named the world’s most improved airline by London-based research company Skytrax last May.

The airline is pushing for expansion by boosting its fleet, expanding international destinations and raising the number of domestic routes.

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