"So the proceeds from the Garuda initial public offering will reach Rp4.751 trillion," State Enterprises Minister Mustafa Abubakar said at his office here on Wednesday.
The minister said the decision to set the price at Rp750 per share was made following intensive discussion and consideration of various aspects including macro-economic, regional and local share market conditions and investors` interest.
Of the total shares to be released 4.4 billions belong to the airline company while the other 1.935 billion to Bank Mandiri.
Based on that Garuda would later receive Rp3.3 trillion while Bank Mandiri Rp1.451 trillion of the total proceeds.
Mustafa said the funds would be enough to meet Garuda`s financial needs.
Following the initial public offering Bank Mandiri`s shares in Garuda will all be diluted in line with the agreement that the shares had to be sold at the first opportunity.
So based upon the initial plan to release 30 percent shares, Garuda would still have four percent shares left which could be sold at anytime through a secondary public offering.
Mustafa said 80 percent of total shares to be allocated for local investors including institutional or retail investors while the rest 30 percent for foreign investors.
"We will prioritize domestic investors because the government wishes Garuda`s share ownership will spread across the community," he said.
The minister`s deputy for restructuring and privatization, Pandu Achiran Djajanto, admitted 10 foreign institutional investors had expressed their strong interest in the aviation company.
"Garuda`s IPO plan has drawn strong response from foreign institutional investors because Garuda`s business prospects are bright while it is also the only airline company to be listed in the capital market," he said.
According to the schedule Garuda`s IPO would be carried out on February 11, 2011, with the offering to be done on February 2, 4 and 7 while the distribution on February 9. (*)
H-YH/HAJM/F001
Editor: Jafar M Sidik
Copyright © ANTARA 2011
