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Garuda Indonesia has revealed the main public investment points of 8. 5 billion rupees ($580 million) approved by parliament in July.
This will take the form of an un guaranteed seven-year bond that will be changed to new shares at maturity.
“The product of the transaction will be used to help the liquidity and solvency of the company, in particular to finance the company’s operations,” the national airline said in an out-of-hours statement on October 14.
The company convenes an ordinary general meeting on November 20 to seek shareholder approval for the mandatory convertible bond and plans to announce the result on November 24.
Although you have not yet specified the bonus call, Garuda states that the amount of shares exchanged will be decided through the capital divided by the conversion price.
The conversion value will be the lowest of 90% of the average final value of the company inventory 25 days before the conversion date, or the final value the day before the conversion date.
The proforma projections for the end of october thirteen involve a conversion value of Rs 206, generating 41. 3 billion new shares that Garuda will factor in to the Ministry of Finance, increasing the number of factored shares from 25. 9 billion to 67. 1 billion.
The government, which has recently held 15. 7 billion shares in the airline, or 60. 5% of the capital, will see its highest stake at 56. 9 billion shares, or 84. 8% of the expanded shares outstanding.
Existing shareholders face a dilution factor of 61%.
The airline states: “The participation of the Government of the Republic of Indonesia (as the company’s majority shareholder) as a potential investor is mandatory given the company’s strategic role in Indonesia’s economic expansion in the future, whether in terms of connectivity of goods and passengers in Indonesia and abroad, which is very important for equitable distribution and to stimulate economic expansion”.
Bonuses will bring 6-monthly coupons payable on both March 31 and September 30, subject to the company’s interest policy rate on the coupon payment date.
If your interest coverage reason is greater than one, which would imply that the gains that would be earned can cover existing interest bills, the bonds will pay a coupon rate equivalent to the effective repurchase rate of seven days on the coupon payment date. currently 4%, is published monthly through Indonesia’s central bank.
The bond will not pay coupons if the interest rate on the company’s policy is less than one.
Garuda says the investment is necessary for its distribution of capital in order to carry out commercial operations.
As of June 30, the Company’s liability was $10. 4 billion, exceeding the price of the assets to $10. 3 billion, resulting in a negative balance of $80. 8 million in equity price, at a price of $2 billion as of December 31, 2019.
During the same period, money and money equivalents increased from $299 million as of December 31, 2019 to $165 million on June 30, while the net current capital deficit increased from $2. 1 billion to $3. 7 billion.
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