JAKARTA – Indonesia’s national flag carrier, PT Garuda Indonesia Tbk. (GIAA), has experienced a significant surge in its stock price, fueled by the anticipated capital injection from Danantara via a private placement.
According to data from the Indonesia Stock Exchange (IDX), GIAA’s stock price climbed by 9.52% to Rp115 per share during the first trading session on Friday, October 10, 2025. This achievement marks the highest price level for GIAA’s shares recorded so far this year. Over the past trading week, GIAA’s shares have impressively soared by 49.35%. Furthermore, the airline’s stock has more than doubled year-to-date (YTD), demonstrating a remarkable 109.09% jump since the first trading day of 2025.
This significant upward movement in GIAA’s share price directly coincides with the company’s preparations to execute a capital increase without pre-emptive rights, commonly known as a private placement. This strategic move aims to strengthen the airline’s financial standing.
Based on official information disclosure, the GIAA private placement will be executed by PT Danantara Asset Management (Persero) through two distinct schemes. The first involves a capital deposit in the form of cash, while the second entails the conversion of existing shareholder loans (SHL) into new shares.
The total value of this private placement is projected to reach US$1.84 billion, equivalent to Rp30.31 trillion (based on an exchange rate of Rp16,421 per US dollar). In a detailed breakdown, Danantara is set to provide a maximum of US$1.44 billion (Rp23.66 trillion) in cash capital deposits to GIAA, alongside converting US$405 million (Rp6.65 trillion) of shareholder loans into new shares.
Before proceeding with the private placement, GIAA will first seek shareholder approval through an extraordinary general meeting of shareholders (EGMS) scheduled for November 12, 2025.
In its disclosure on Thursday, October 9, 2025, GIAA Management outlined three primary objectives for this private placement. Firstly, the initiative aims to improve the company’s consolidated equity value. Secondly, it seeks to enhance corporate liquidity, thereby strengthening its capital structure and reducing consolidated liabilities. “Thirdly, a further improvement in financial health will bolster the company’s future business sustainability with a more robust financial foundation,” GIAA Management stated.
This substantial capital injection is expected to significantly improve GIAA’s financial performance, which has recently been plagued by challenges such as negative equity and persistent losses. As of June 30, 2025, GIAA’s assets stood at US$6.51 billion, yet its liabilities amounted to US$8.01 billion. Consequently, GIAA reported a negative equity of US$1.49 billion.
For the first half of 2025, GIAA also reported a net loss attributable to the parent entity of US$143.7 million, or Rp2.33 trillion (based on the Jisdor exchange rate of Rp16,231 per US dollar as of June 30, 2025). This net loss represents a significant 41.36% year-on-year (yoy) increase compared to the US$101.65 million (Rp1.64 trillion) loss recorded in the same period of the previous year.
Outlook for Garuda Indonesia (GIAA) Shares
Analysts at Kiwoom Sekuritas Research Team view GIAA’s private placement as having several positive implications, notably the potential for equity to turn positive. “This development opens up opportunities for GIAA to meet the requirements for exiting the special monitoring board [full call auction/FCA], provided it fulfills the IDX’s criteria,” stated the Kiwoom Sekuritas Research Team on Wednesday, October 8, 2025.
Furthermore, the private placement is expected to improve GIAA’s liquidity and solvency while reducing its interest and debt burdens. Financially, the improvement in the debt-to-equity ratio via the shareholder loan (SHL) debt-to-equity swap, coupled with the capacity to settle obligations using new cash funds, will bolster solvency. This also creates room for gradual expansion, including fleet and route enhancements. However, sustained profit improvement remains contingent on operational execution and prevailing market conditions. Nevertheless, the private placement is seen as providing crucial impetus for more flexible operations.
“The substantial allocation of funds towards Citilink and fleet maintenance is anticipated to boost utilization and service reliability, thereby supporting improvements in load factor and yield. Profitability, however, will continue to be influenced by cost efficiency, jet fuel prices, exchange rates, and market demand,” the Kiwoom Sekuritas Research Team concluded.
On the other hand, while the Kiwoom Sekuritas Research Team acknowledges the structural boost provided by the private placement, they also highlight execution risks and significant dilution potential due to the issuance of new shares. For retail investors, a more prudent approach would be to await certainty regarding the EGMS results, the actual realization of cash deposits or conversions, official post-transaction reports, and tangible evidence of improved operational indicators such as load factor, on-time performance, yield, and future fleet or route plans.
Herry Gunawan, an observer from the Next Indonesia Center for State-Owned Enterprises (SOEs), pointed out that Garuda Indonesia’s financial burden primarily stems from aircraft lease expenses and debt. Therefore, he suggests that Danantara, as a shareholder, should collaborate with Garuda to resolve these core issues, potentially by negotiating with aircraft providers and creditors for concessions. According to Gunawan, restructuring Garuda Indonesia’s financial obligations or injecting additional capital to address its financial burdens is indeed crucial for resolving GIAA’s challenges.
He further advised, “Garuda Indonesia should undertake a complete restructuring of its business model, focusing solely on being an airline operator. All non-core subsidiaries, such as those in catering or hotels, should be divested. It would be more beneficial for Garuda to build an ecosystem that allows for risk sharing while also supporting private businesses, including Micro, Small, and Medium Enterprises (MSMEs),” Herry added.
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Summary
Indonesia’s national flag carrier, PT Garuda Indonesia Tbk. (GIAA), has seen its stock price surge significantly, reaching its highest level this year, driven by the anticipated US$1.84 billion capital injection from Danantara through a private placement. GIAA’s stock climbed 9.52% to Rp115 per share, contributing to a 49.35% gain over the past week and a remarkable 109.09% increase year-to-date. This strategic move aims to bolster the airline’s financial standing and will be executed through both cash deposits and the conversion of existing shareholder loans into new shares.
The total private placement value is projected at Rp30.31 trillion, comprising a maximum of US$1.44 billion in cash capital and US$405 million from converting shareholder loans. The initiative’s primary goals are to improve GIAA’s consolidated equity value, enhance corporate liquidity, strengthen its capital structure, and reduce liabilities, addressing its recent negative equity and net losses. Shareholder approval for this private placement is scheduled for an Extraordinary General Meeting of Shareholders (EGMS) on November 12, 2025.