Garuda in Talks with Investors over Citilink Acquisition

TEMPO.CO, Jakarta -  State-owned airline Garuda Indonesia is seeking for a strategic investor for its subsidiary, PT Citilink Indonesia. Garuda's CEO Emirsyah Satar said the company is in talks with two investors interested to acquire Citilink shares. Initially there were four investors.

Satar said the airline is still negotiating with the two prospective investors and Citilink's shares will be sold for an optimum price. According to Satar, the company is targeting to come up with a decision by June.

Satar was reluctant to mention Garuda's sales price target and the amount of shares to be sold. He was also unwilling to disclose the name of the potential investors.

Citilink's stock sale is part of Garuda's plan to develop the low cost airline business. According to reports, Garuda will remain as the majority shareholder after Citilink's shares are sold.

Citilink began operating commercially in 2012. As of March 2014, Garuda has a 99.99 percent stake in Citilink. In March 2014, Citilink's asset value rose to US$111.49 million from December 2013's US$106.05 million.

Gatot Triharhgo, deputy head of financial, construction, and other services at the Ministry of State-Owned Enterprises, said selling Citilink stocks will have positive impact on Garuda. He said that Citilink's performance has been a burden to the state airline; posting US$48.48 million in 2013 alone.

ANANDA PUTRI