Garuda to go public in 1998 by selling 30% of its shares

JAKARTA (JP): The state-owned airline Garuda Indonesia is to sell 30 percent of its total shares to the public in early 1998, marketing director Sudarso Kaderi said.

"We planned to go public early next year. But if we're not ready we will have to postpone the plan," Sudarso told the press at the Indonesia Tourism Mart and Expo 1996 here Thursday.

He said that based on the experiences of other state-owned companies -- PT Telkom, PT Indosat and PT Tambang Timah -- two years are not enough to prepare a share listing on the capital market. Their preparations alltook more than two years.

"We, therefore, will be serious in preparing ourselves, so that we'll be ready in two years," said Sudarso, as quoted by the Kompas daily.

He noted that his company will shed all unrelated and non- profitable activities, such as hotels and travel bureaus, and will focus only on the core business -- air transportation services.

According to Sudarso, Garuda will also halt non-profitable flight routes, which have a load factor of less than 50 percent, and unnecessary stop-overs.

Garuda, the country's national flag carrier, recently closed its international routes from Jakarta to Madrid, Berlin, Vienna and Zurich.

Garuda incurred a loss of Rp 2.7 billion (US$1.17 million) during the first half of this year, but it expects to post a net profit of Rp 124.7 billion during the second six months, which is traditionally the peak season for air transportation. (13)