Ivan Dasa Saputra
State-controlled airline Garuda Indonesia is planning an initial public offering for either of its subsidiaries in a move to help improve corporate governance.
Emirsyah Satar, president director of the flag carrier, said the company had named Mandiri Sekuritas as the financial adviser for the IPO plan. Garuda has two units: GMF Aero Asia and Aerowisata.
“We are still thinking whether to take GMF Aero or Aerowisata for the IPO,” Emirsyah said after an extraordinary shareholders meeting in Jakarta on Thursday.
Aerowisata, the larger unit of Garuda, provides in-flight catering services, hotels and resorts, land transportation and cargo storage.
GMF Aero Asia maintains Garuda’s fleet. The company also provides engineering and maintenance services to various airlines in the region. GMF recently agreed to be the official maintenance service provider in the Asia-Pacific region for aircraft made by Canada-based Bombardier.
Emirsyah said Mandiri Sekuritas would have to assess the viability of the two units for the IPO.
The assessment, he added, will be completed in one month.
Mandiri Sekuritas “will evaluate the value of the companies, their sustainability, whether they are viable for an IPO or not. If they are viable, [it will say] when is the best time [for an IPO],” Emirsyah said.
The number of air travel passengers in Indonesia is expected to increase in the coming years in line with accelerating economic growth.
Emirsyah said there were about 60 million domestic passengers last year, while in 2015 that number could reach 90 million with international passengers accounting for another 30 million flyers.
According to Emirsyah, airlines were continuing their rapid growth in the country and across the region.
In 2011, there were 705 aircraft owned by local carriers. By 2015, there will be a total of 966 planes, he said.
Shares of Garuda, which made stock market trading debut early last year, fell 1.4 percent to Rp 700 on the Indonesia Stock Exchange on Thursday. Its shares have risen 47 percent so far this year, outpacing the 1.7 percent advance in the benchmark stock measure, the Jakarta Composite Index.
Shareholders of the airline also appointed Peter F. Gontha as an independent commissioner of Garuda Indonesia, Emirsyah said after the meeting.
Peter, a veteran banker, is the publisher of BeritaSatu Media Holdings, which is owned by the Lippo Group. The Jakarta Globe is part of BeritaSatu.
Many Indonesian companies have been struggling to lure more investors amid uncertainty in global financial markets stemming partly from the euro zone’s sovereign debt crisis. Coal miner Toba Bara Sejahtra and heavy equipment distributor Kobexindo Tractors have scaled back the size of their share sales in their planned IPOs for this year.