Indonesia’s Garuda Maintenance Facility AeroAsia (GMF AeroAsia) has raised just 1.27 trillion rupiah ($95 million) from its IPO, IFR reported, substantially less than what the maintenance subsidiary of PT Garuda Indonesia Tbk had hoped for.
GMF AeroAsia had intended to garner as much as 5.55 trillion rupiah in the initial public offering (IPO), with planned sales of a maximum of 10.9 billion shares within a range of 390-510 rupiah per share.
IFR, a Thomson Reuters publication, said GMF AeroAsia priced the IPO at 400 rupiah per share on Tuesday, close to the bottom end of the indicated range. IFR cited two people with knowledge of the transaction.
The company decided to sell only 10 percent of its stake through the IPO, half the originally planned 20 percent, IFR said.
GMF AeroAsia had also been seeking to sell an additional 10 percent stake to strategic partners as part of the process. It is not clear where that plan stands now.
Pahala Mansury, the CEO of parent company Garuda Indonesia, declined to comment on the report. GMF AeroAsia was not immediately available for comment.
Indonesia’s IPO market has struggled in the last few years due to high valuations and worries about economic growth in Southeast Asia’s biggest economy. But companies there were boosted by the mid-May upgrade to the country’s credit rating to investment grade by Standard & Poor’s, which gave them an opportunity to raise funds on better terms.
GMF AeroAsia had also been seeking to bring in strategic partners as it looks to build a new maintenance facility at Batam Island near Singapore and increase the proportion of work it does for customers other than Garuda.
Earlier this month, Air France Industries KLM Engineering & Maintenance (AFI KLM) said in a statement that it has signed a letter of intent with GMF AeroAsia to “move up” their longstanding partnership. However, to date AFI KLM has not announced an investment in GMF AeroAsia.