Flag carrier PT Garuda Indonesia is turning to a new share sale to shore up its finances after surging fuel costs wiped out its remaining equity, just months after the airline received a US$1.4 billion rescue from sovereign wealth fund Danantara.
Garuda plans to issue up to 124.4 billion new shares through a rights issue as part of its 2025-2029 restructuring plan.
Danantara Asset Management will participate by contributing its 65.8% stake in aircraft maintenance unit PT Garuda Maintenance Facility Aero Asia, rather than providing another cash injection.
Cash proceeds from the rights issue will instead come from other shareholders who exercise their rights.
The move comes after higher fuel costs further weakened Garuda’s financial position, adding urgency to efforts to strengthen its balance sheet.
The airline received a US$1.4 billion rescue from Danantara earlier this year, but the latest deterioration highlights the continued financial pressure facing the national carrier as operating costs remain elevated.
Bloomberg
