Garuda Unit GMF Plans $340M Rights Issue, API to Join as Major Shareholder
Jakarta. Aircraft maintenance company Garuda Maintenance Facility Aero Asia (GMFI) plans to launch its second rights issue as part of Garuda Indonesia Group’s ongoing financial restructuring, aiming to strengthen its capital base and improve its balance sheet.
According to its prospectus, GMF AeroAsia (GMFI) plans to issue 124.27 billion Series B shares at a nominal value of Rp 25 each. Garuda Indonesia (GIAA), the parent company, will hand over its rights to Angkasa Pura Indonesia (API), which will contribute 972,123 square meters of land at Soekarno-Hatta International Airport in Tangerang as a non-cash asset.
The rights issue will boost GMFI’s fixed assets by an estimated Rp 5.66 trillion ($340.3 million), significantly improving the company’s capital structure and reducing rental costs. Following the move, GMFI’s equity position is projected to swing from a $249 million deficit to a positive $103 million.
Financial indicators are also expected to improve, with return on equity rising from minus 3.5 percent to 8.5 percent, and the current ratio increasing from 87.9 percent to 90.7 percent.
However, shareholders who choose not to exercise their rights risk being diluted by up to 76.79 percent. Proceeds from the rights issue, excluding the non-cash injection, will be used as working capital, mainly for aircraft maintenance materials and spare parts.
Post-rights issue, API will become GMFI’s majority shareholder, while Garuda Indonesia’s ownership will decline.
“In line with Garuda Indonesia Group’s financial restructuring program, the equity improvement initiative will be conducted through API’s non-cash asset contribution to GMF,” the management stated in the prospectus.
The corporate action is part of Garuda’s broader strategy to strengthen capital, reduce lease burdens, and sustain its maintenance, repair, and overhaul (MRO) business. The rights issue will proceed once approved by the Financial Services Authority (OJK).
As of Thursday at 2.00 PM, GMFI shares gained 3.33 percent to Rp 93.
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