Garuda to raise US$500m dollars in IPO

Flag carrier Garuda Indonesia plans to raise around 500 million dollars from its imminent initial public offering, a report said Tuesday, kickstarting a year of expansion.

The airline is selling 9.36 billion shares, of which 21 per cent belong to Bank Mandiri, according to a term sheet seen by Dow Jones Newswires.

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

Once listed, 36.5 per cent 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 100 million dollars 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. Source: Channel News Asia and IFR