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PT DANANTARA Asset Management (DAM) is said to be injecting capital into PT Garuda Indonesia Tbk (GIAA) through additional capital without pre-emptive rights (PMTHMETD) of US$1.84 billion or IDR30.31 trillion. Analysts assess that this makes GIAA’s business prospects positive.
According to the Head of Equity Research at Kiwoom Sekuritas Indonesia, Liza Camelia Suryanata, said the capital injection from Danantara will have a significant positive impact on Garuda Indonesia. GIAA’s equity has the potential to turn positive from around minus US$1.5 billion as of June 30 to positive around US$350 million after the transaction.
“This opens up the opportunity to fulfill the requirements for leaving the Special Monitoring Board (FCA), provided that it meets the exchange criteria,” said Liza in an official statement, Thursday (10/09), 2025.
In addition, the company’s liquidity and solvency are expected to improve. Cash and cash equivalents will increase by around US$1.44 billion, the current ratio will increase from 0.44x to 1.53x, and the debt to asset ratio will decrease from 123% to 96%. “The company is also targeting working capital to turn positive,” she said.
Liza explained that the conversion of Shareholder Loans (SHL) of around US$405 million would immediately reduce interest-bearing liabilities. Previously, this SHL was disbursed in stages from June to September or around IDR6.65 trillion.
With a healthier financial structure, Garuda’s operations will be more flexible. A big focus is directed at strengthening Citilink’s subsidiaries and improving fleet maintenance to improve utilization and service reliability.
This is expected to support an increase in load factor and yield, although profitability remains dependent on cost efficiency, aviation fuel prices, the rupiah exchange rate and market demand.
“GIAA’s debt will be reduced significantly and expansion can run more smoothly. Improvements in the debt-to-equity ratio through the SHL debt-to-equity swap as well as space to pay off obligations from new cash funds will increase solvency and open up opportunities for gradual expansion,” said Liza.
However, he reminded that profit recovery remains highly dependent on operational execution and market conditions.
Liza assesses that, structurally, this corporate action will have a positive impact on GIAA shares. However, there are major execution and dilution risks resulting from the issuance of new shares.
Therefore, he advised retail investors to wait for confirmation of the EGMS results and the realization of cash deposits and conversions. Investors are also advised to pay attention to post-transaction pro-forma financial reports, as well as concrete evidence of improvements in operational indicators such as load factor, flight timeliness, yield, and fleet and route expansion plans.
Danantara is listed as the largest shareholder in GIAA with ownership of 59.03 billion shares or the equivalent of 64.54% of the total outstanding. The government acts as controller with ownership of 1 share.
On the other hand, Garuda Indonesia shares held by the public reached 25.12 billion or 27.46% of the total. In the prospectus published by Garuda Indonesia in the information disclosure on the Indonesia Stock Exchange, GIAA is estimated to issue 407,897,094,461 new shares with an implementation price of IDR75 per share.
In this action, all new shares will be absorbed by Danantara Asset Management as the company’s investor and creditor. In the absence of stock subscription rights for other shareholders, the public ownership portion will be significantly diluted, from around 27.46% to only around 5.03%.
In terms of GIAA share price predictions after carrying out the Private Placement, D’Origin Advisory stated that the prospects for GIAA shares will improve. Currently GIAA is testing resistance 99 which strengthens the indication of rising stock prices (bullish). He stated, if GIAA is able to break out from level 100, then GIAA will confirm bullishness.
D’Origin advises investors to enter GIAA shares at level 96 with target prices at levels 115, 130 and 160. However, if the share price is below 87, D’Origin advises investors to sell. In yesterday’s trading, Thursday (9/10), GIAA’s share price closed up 9.09% or 8 points to level 96. The share price has risen 74.55% since the beginning of the year. [kontan.co.id/photo special]
