GARUDA IPO GUIDE PRICE TOO HIGH, SAY INVESTORS

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By admin January 25, 2011 15:15

GARUDA IPO GUIDE PRICE TOO HIGH, SAY INVESTORS

Garuda’s high guide price for its initial public offering has been raising concerns with investors, which is leading some to suggest that the airline might raise far less than the $1 billion it hoped for.

The low level of interest in the offering will be a serious blow to the airline, which completed a five-year debt restructuring in December and has made considerable progress over the past few years in improving its financial and safety performance.

Marketing of the Garuda issue was due to close at 5pm yesterday but sources report that the process had “gone very badly, especially with overseas investors”, with interest with European and US investors particularly low. As a result analysts expect the issue to raise about $350m in primary proceeds, with the shares priced at or near the bottom of the Rp750-Rp1,000 range set by the Indonesian government.

The banks advising on the Garuda issue are PT Bahana Securities, PT Danareksa Sekuritas and PT Mandiri Sekuritas, with Citigroup and UBS as international bookrunners.

admin
By admin January 25, 2011 15:15
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