Garuda making preparations to go public

Garuda making preparations to go public

JAKARTA (JP): Rather than procuring new aircraft, the
country's flag carrier, Garuda Indonesia, is currently improving
its efficiency and financial soundness in preparation for going
public within the next two years, a senior official said.

"The earliest Garuda, which is still consolidating, could go
public is 1998. An inter-ministerial team will determine whether
Garuda's shares will be offered domestically or internationally,"
Director General of Air Transportation Zainuddin Sikado saiod on
Thursday.

He did not disclose the number of shares which would be
offered by Garuda, saying that the Ministry of Finance was
discussing the matter.

As a consequence Garuda should, at the time being, not
consider purchasing or leasing any new aircraft, he said.

"After the planned public offering, Garuda will hopefully gain
fresh money which can be used to finance aircraft procurement,"
he said.

Garuda's president, Soepandi, said earlier this week that his
company was considering strengthening its fleet with new Boeing
B-777 jets. Soepandi made the statement after meeting a Boeing
executive at the Asian Aerospace air show in Singapore on
Tuesday.

Meanwhile, Soepandi confirmed at a hearing with the
transportation and tourism commission of the House of
Representatives yesterday that Garuda was currently preparing
itself for public flotation.

"No single party would be interested in buying Garuda's shares
if we offer them now. After we revitalize ourselves, the first
step will be to invite private companies to make investment
placements to become our strategic partners," he said. "We will
then prepare for public flotation."

Yesterday's hearing, which involved Garuda and its subsidiary
Merpati Nusantara Airlines, included many tough questions, mostly
about the poor management of the two carriers, their human
resources, finances and services.

Commission member Budi Haryanto, said that topics of most
hearings with Garuda and Merpati were always about the same
things, illustrating no improvements in either of the firms.

Several legislators also quizzed both Soepandi and Merpati's
president, Budiarto, about their financial reports.

They believed that Garuda should have suffered losses in 1995
even though Soepandi reported yesterday that in the first nine
months of 1995 alone, the air carrier made a profit of Rp 18.8
billion (US$7.8 million).

Minister of Transportation Haryanto Dhanutirto told the
commission late last month that Garuda was profitable last year.

The minister said that among the 17 state-owned transportation
firms, Garuda recorded its highest ever profit, of Rp 249.39
billion ($107.77 million), in 1995.

Haryanto added that Garuda, which recorded a profit of Rp
191.22 billion ($82.63 million) in 1994, was expected to make a
profit of Rp 154.72 billion ($66.86 million) this year.

Garuda's director of finance, Jazid Adam, told reporters after
yesterday's hearing that he had been absent during the hearing
between the commission and Haryanto last month.

"I haven't studied the minister's report. Neither can I tell
you whether Garuda suffered losses or gained a profit in 1995,"
he said. (icn)