Indonesia's Government set the offer price of Garuda’s IPO at the bottom of an indicative range on 26-Jan-2011 and said it may make fewer companies public in 2011 than planned (Bloomberg/Financial Times/Jakarta Globe, 26-Jan-2011). Minister for state-owned enterprises, Mustafa Abubakar, said Garuda would list 6.3 billion shares, or 26.67% of equity at IDR750 per share which is at the bottom end of the indicative price range of IDR750-1100. The initial share sale raised approximately USD530 million (IDR4.77 trillion) of which Garuda will receive IDR3.3 trillion and Mandiri will collect IDR1.45 trillion. The sale is less than the USD1.1 billion government officials had said they were aiming for, due to lack of interest and fears over the local stock market. The IPO will assist in the purchase of new aircraft, whereby Garuda’s “Quantum Leap” growth plan, aims to boost its fleet to 116 aircraft by 2014, consisting of mostly single-aisle aircraft.
Indonesian Government: “At present, the global market is not faring so well, and neither is our stock market. We need to be prudent about this situation. Garuda is our national pride. The price should be higher than that range. If you look at it from the initial range, the IDR750 price tag is really not too cheap.” Minister for state owned enterprises, Mustafa Abubakar. Source: Jakarta Globe, 26-Jan-2011.