Indonesia: GMF AeroAsia allocates 10% for strategic investor in IPO; raises target to $422m

Workers clean the body of a Garuda Indonesia Airbus A320 aircraft inside Hangar 4 of PT Garuda Maintenance Facility (GMF) Aero Asia at Soekarno-Hatta airport in Jakarta.

Garuda Indonesia’s subsidiary GMF AeroAsia is looking to sell 10 per cent of the company to foreign strategic investors via its planned initial public offering (IPO), officials revealed Monday. It has also raised the IPO proceeds target to between $318 million and $422 million, from previous estimates of $200-300 million.

The firm is offering a total of 10.9 billion new shares, or equivalent to 30 per cent of GMF’s paid up capital, at Rp 390 – 510 apiece in potentially Indonesia’s largest IPO this year. About 20 per cent will be offered to public, while the remaining 10 per cent will be allocated to strategic investors.

GMF finance director Helmi Imam Satriyono said that the company is currently in talks with five potential strategic investors – mainly firms operating in the maintenance, repair and overhaul (MRO) sector from Europe and Asia. It is unclear how the price will be pegged for these investors.

“We’ll see about the terms later because (they will enter) after IPO. We are also still studying about whether the price will be in accordance with the final IPO price,” Satriyono told reporters on the sidelines of a company conference in Jakarta.

According to plan, the book building period will run from September 11 to 21, and the shares can be listed on the IDX in October. Mandiri Sekuritas has been named lead coordinator of four underwriters, including BNI Securities, Bahana Securities, and Danareksa.

Speaking exclusively to DEALSTREETASIA earlier, GMF president director Iwan Joeniarto had said that proceeds will be used for expansion and capital expenditure as well as to strengthen capital structure. The firm currently holds 32 per cent of domestic market share, and is looking to boost capacity.

“We have monopolized the local market but not yet the regional one as we have plenty of global competitors. That’s why we see this IPO as a great opportunity to expand further. We want to boost capabilities and capacity,” Joeniarto had said.

“Becoming a public company will help us grow into a much, much better company: more liquidity, more transparency, more openness. There is nothing you can hide once you go public, we’ll be ready to be audited anytime. This will change our mindset, and everyone will strive to deliver the best,” he added.

GMF claims to be the number one MRO company in Indonesia. It has a double digit profit margin and steady growth of 20 per cent since 2014. EBITDA margin is reported at 18 per cent. The firm booked $200.2 million in revenues during the first half of 2017, or nearly half of the targeted revenue for this year of $424 million.

GMF is setting aside $400 million for five-year capital expenditure (capex) to help the company double its revenue and hit $1 billion in revenue by 2022. The company is also eyeing at least 10 joint ventures (JVs) with international firms following the IPO.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.