Indonesia - Bakrie Group to Explore Acquiring Garuda Shares

Bakrie Group has expressed interest in buying stakes in Garuda Indonesia from three state brokerage firms in a bid to improve the airline’s books, State Enterprises Minister Dahlan Iskan said on Thursday.

“He finally replied to my short text message. They said they would study it,” Dahlan said.

Dahlan was referring to Nirwan Bakrie, the chairman of Bakrie Group, as the one responding to his text message. Nirwan is also the brother of Aburizal Bakrie, one of the country’s richest businessman and chairman of the Golkar Party.

The Bakries are the latest rich Indonesians to positively response to Dahlan’s calls for local investors to purchase shares in flag carrier Garuda. The minister also said he had pleaded with several local tycoons to buy Garuda’s shares, “or they will surely be taken by foreigners.”

Among those who have expressed interest are Chairul Tanjung, the founder of CT Corporation whose businesses range from banks to television stations; Rahmat Gobel, president commissioner of electronics maker Panasonic Gobel Indonesia; and Sandiaga Uno, founder of investment firm Saratoga Capital, which is also completing a restructuring of ailing Mandala Airlines.

Dahlan said the sale process would be determined by the securities firms holding Garuda’s shares and the bidders.

“My role ends here. Now, I leave it entirely to the three securities firms,” the minister said, adding that he hoped the sale could be completed by the end of this month.

Danareksa Sekuritas, Bahana Securities and Mandiri Securities were underwriters for Garuda’s initial public offering. When the carrier’s shares flopped on their Feb. 11, 2011, debut and plummeted 17 percent, they absorbed as much as 47 percent of the IPO, or 6.3 billion shares. The three firms took a combined 10.6 percent stake in Garuda.

Government intervention in the IPO was widely blamed for scaring off potential investors. The three securities firms suggested to then-State Enterprises Minister Mustafa Abubakar that the range for Garuda’s shares should be Rp 560 to Rp 85 each, but the minister decried that as too low and insisted on a range of Rp 750 to Rp 1,100.

The shares were eventually priced at Rp 750, but they closed their first day of trading on the Indonesia Stock Exchange at Rp 620. Garuda raised Rp 4.8 trillion ($523.2 million) from the IPO, well short of optimistic initial projections of Rp 7 trillion to Rp 10 trillion.

Danareksa, Bahana and Mandiri cannot offload their Garuda shares individiually because of an agreement to sell them simultaneously at slightly above market price, Dahlan said.

Garuda’s share price rose 3.3 percent to Rp 620 in trading on Thursday.

Dion Bisara

The Jakarta Globe

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