Garuda To Issue Bonds To Raise Funds For Increasing Performance

Jakarta, June 11 (Antara) - PT Garuda Indonesia Tbk. (GIAA) plans to issue bonds to raise Rp2 trillion to increase the company`s performance. "Around 80 percent of the proceeds would be used to buy new aircraft and 20 percent others as a working capital to pay lease," the company`s president director, Emirsyah Satar, said here on Tuesday. He said the company plans to operate 194 planes consisting of 114 units by Garuda and 50 units by its subsidiary, Citilink, by 2015. This year, he said, the company would purchase 24 new planes to increase the current fleet of 106 planes. He said the new planes to be procured include B737-800NG, B777-300ER, A330-300 and A320. PT Garuda Indonesia has appointed Mandiri Sekuritas and Bahana Securities as the underwriters. The initial offering is set on June 11-14 and on June 17-19 to accommodate investors` interest. Bahana Securities director, Novita Lubis, said she believed investors would be interested in the bond although the country`s capital market is less conducive now. "Conditions in the domestic capital market are not quite conducive but the company and underwriters remain confident the offer would be taken by the market," she said. She said Garuda has a positive prospect so that investors could put their funds there for investment. "Investors would seek bonds as one of the attractive investment instruments," she said. PT Garuda Indonesia Tbk. plans to conduct the first phase of sustainable public offering in the form of a series of bond with a target of Rp2 trillion. The first phase bond offers a coupon of 8.25-9.25 percent a year and a tenure of five years. Mandiri Sekuritas managing director Iman Rachman said the bond interest reflects the current rate of state securities plus premium. "The value is 300-400 points above the state securities` interest. The interest is higher than the average interest of listed bonds with the same rating," he said.