JAKARTA (Reuters) - Garuda Maintenance Facility AeroAsia, the aircraft maintenance and repair unit of Indonesian flag carrier PT Garuda Indonesia Tbk (GIAA.JK), is raising as much as 5.55 trillion rupiah ($422 million) from an IPO to help drive its expansion plans.
GMF AeroAsia is selling a maximum of 10.9 billion new shares at a price range of 390-510 rupiah apiece, a term sheet shows.
The company is hoping to sell 10 percent to strategic investors, said Helmi Imam Satriyono, finance director at GMF’s parent Garuda. Five maintenance, repair and overhaul (MRO) companies from Asia and Europe had shown interest, he added.
“This offering is mainly to drive global expansion,” GMF CEO Iwan Joeniarto said at a briefing on Monday.
“The MRO industry is very attractive and relatively safe in relation to economic conditions,” he said, adding GMF had a profit margin of 15 percent for 2016.
GMF is the largest aircraft maintenance operator in Indonesia and its clients include airlines from 55 countries, according to its website. Listed regional competitors include Singapore-based SIA Engineering Company Ltd (SIAE.SI) and Hong Kong Aircraft Engineering Co Ltd (0044.HK).
Garuda owned 99 percent of GMF as of July, according to GMF’s presentation slides.
Garuda CEO Pahala Mansury told Reuters in May the state-controlled airline planned to increase the contributions from its food catering and ground-handling units to improve its financial performance.
Garuda reported a wider net loss for the first half of 2017, hurt by the costs of participating in the government’s tax amnesty scheme. It also sought consent to amend certain terms on its $500 million global sukuk bonds due 2020.
Reporting by Cindy Silviana; Additional reporting by S. Anuradha of IFR; Writing by Eveline Danubrata; Editing by Himani Sarkar