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)