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Government committed to Garuda Indonesia IPO

16-Aug-2010 11:09 AM

Indonesia's Government stated it is committed to the launch of Garuda Indonesia’s IPO at the end of Nov-2010, despite the carrier reporting a reduction in 1H2010 profit (ANTARA News, 13-Aug-2010/The Jakarta Globe, 14-Aug-2010). State Enterprises Minister, Mustafa Abubakar, stated the slide in net profits is “normal for the first half performance of airline companies” and the carrier has seen an improvement in bookings since (The Jakarta Globe, 13-Aug-2010). The government plans to offer 40% of the carrier’s shares in stages, with the portion of shares to be sold to depend on the market. The amount to be raised from the IPO will depend on the results of a valuation. The government also named three underwriters for the offering, Bahana Securities, Mandiri Sekuritas and Danareksa Securities, under a consortium. The underwriters will also determine one or two additional underwriters. The IPO is expected to increase Garuda’s net profit by 10%-15% by year's end.