Garuda Indonesia's shareholders approve rights issue plan

Garuda Indonesia secured Friday approval from its shareholders to launch a right issue in December to raise up to 14.3t rupiah ($929.48m), the company said. The rights issue will allow the government to top up Garuda's capital by 7.5t rupiah, a plan that had been approved by the parliament in April, according to a prospectus for the transaction. The government's additional investment is part of Garuda's promise to debtors to strengthen its capital following the airline's court-supervised debt restructuring programme agreed in June. Garuda plans to offer shares at a price range of 182 to 210 rupiah a piece, meaning in total it would be able to raise up to 14.3t rupiah, including the government's capital top up, if other shareholders fully subscribe to the sale at the highest price. "The company will optimise the additional capital mainly for maintenance, aircraft restoration, fuel, plane leases...The (proceeds) hopefully can strengthen the company's business outlook," CE Irfan Setiaputra said. Shareholders also approved the conversion of 4.2t rupiah worth of liabilities into equity - part of the debt restructuring agreement. Assuming all stakeholders participate in the rights issue at the maximum price, the government's stake in the carrier would shrink to 51.25% from 60.54% previously.<br/>