Garuda Indonesia's CEO Emirsyah Satar said the company never considered delaying its listing, despite weak demand and market sentiment that caused the shares to close down 17% on their trading debut on 11-Feb-2011 in Jakarta (The Wall Street Journal, 16-Feb-2011). Garuda originally sought to raise USD1 billion through a sale of 37% of the company, but the sale was then scaled back to a 24% stake, and raised USD537 million after the stock priced at the bottom of its indicative range. Almost 40% of the shares had to be absorbed by three domestic lead underwriters, all of which are state-owned. Mr Satar added that 80% of the money raised from the IPO will be used for pre-delivery payments and financing needs for the fleet until the end of 2012 are already sealed.
Garuda: "It was very clear that the pricing, the amount of shares, the timing, were in the hands of the owners. When we began the process, the index was at around 3700 points. We started the roadshow, registered to our stock exchange regulator – the process was already rolling. The government could delay the IPO, but it would have to come up with the money. As far as management was concerned, we needed the USD350 million [on top of an existing equity base of USD380 million]; otherwise we couldn't execute our business plan." CEO Emirsyah Satar. Source: Wall Street Journal, 16-Feb-2011.