Indonesia's GMF AeroAsia Raises $95m in IPO, Far Less Than Planned: IFR
Jakarta. Indonesia's Garuda Maintenance Facility AeroAsia (GMF AeroAsia) has raised just Rp 1.27 trillion ($95 million) from its IPO, IFR reported, substantially less than the maintenance subsidiary of Garuda Indonesia had hoped.
GMF AeroAsia had intended to garner as much as Rp 5.55 trillion in the initial public offering (IPO), with planned sales of a maximum of 10.9 billion shares within a range of Rp 390 to Rp 510 per share.
IFR, a Thomson Reuters publication, said GMF AeroAsia priced the IPO at Rp 400 rupiah per share on Tuesday (26/09), close to the bottom end of the indicated range. IFR cited two people with knowledge of the transaction.
The company decided to sell only 10 percent of its stake through the IPO, or half what it originally planned, IFR said.
GMF AeroAsia had also been seeking to sell an additional stake of 10 percent to strategic partners as part of the process. It was not clear where that plan stands now.
Corrine Png, the chief executive of transport research firm Crucial Perspective, said demand for the IPO was weak, in part because the global aircraft maintenance and repair market was suffering from overcapacity and rate pressure.
"GMF AeroAsia's workload is not well-diversified and too dependent on Garuda Indonesia, which is loss-making," she said.
"Unfortunately, the small size of the placement also deters foreign investors, given concerns about the future trading liquidity of the stock."
Garuda chief executive Pahala Mansury declined to comment on the IFR report. GMF AeroAsia was not immediately available for comment.
Indonesia's IPO market has struggled in the last few years, battling high valuations and worries about economic growth in Southeast Asia's biggest economy. But companies were boosted by the mid-May upgrade of Indonesia's credit rating to investment grade by Standard & Poor's, giving them the opportunity to raise funds on better terms.
GMF AeroAsia had also been seeking to bring in strategic partners as it looks to build a new maintenance facility at Batam Island near Singapore and boost its work for customers besides Garuda.
In a statement this month, Air France Industries KLM Engineering & Maintenance said it signed a letter of intent with GMF AeroAsia to "move up" their longstanding partnership. But it has not, so far, announced an investment in GMF AeroAsia.
Additional reporting by Cindy Silviana in Jakarta and Jamie Freed and Anshuman Daga in Singapore
Reuters
Tags: Keywords: