Garuda Indonesia has released the prospectus for its Rp1.48 trillion ($126 million) limited public rights offering.
The airline will issue rights for 3.23 billion B-series common shares at a nominal value of Rp459 per share. Each holder of 701,409 current shares will be eligible for 100,000 rights, with each right entitling the shareholder of purchase new shares priced between Rp460 to Rp 500.
An extraordinary general meeting has been called for 24 March for shareholders to approve the issue. Following that, the recording date for existing shareholders has been set for 4 April, with distribution to take place on 7 April and trading of rights commencing the following day up until 16 April, after which the associated shares will be issued.
Bahana Securities, Mandiri Securities and Danareksa have been appointed as the underwriters of the issue, the airline says.
It adds that following the issue of the new shares, the Indonesian government’s stake in the airline will dilute to approximately 60%
The prospectus shows that Garuda plans to use 80% of the proceeds will be used to fund the acquisition of new aircraft, including Boeing 737s, 777, Airbus A330s and A320s. The remaining 20% will be allocated to working capital, namely lease payments on a number of its other aircraft types.
Garuda recorded a 90% plunge in net profit over 2013 to $11.2 million, largely attributed to the weakness of the Indonesian rupiah.