Garuda Indonesia (GIAA), the national flag carrier, is set to issue a substantial 315.61 billion Series D shares, each with a nominal value of Rp 75. This strategic move will be executed through a Private Placement (PMTHMETD), a capital increase without pre-emptive rights, signaling a significant step in its financial recovery.
As disclosed to the Indonesia Stock Exchange (BEI) on Saturday, November 8, Garuda Indonesia‘s management confirmed that this substantial new share issuance will involve PT Danantara Asset Management (DAM) in a dual capacity: both as a pivotal investor and a key creditor.
This significant corporate action is projected to raise a total of Rp 23.67 trillion (approximately USD 1.5 billion), a critical injection of funds. The amount comprises Rp 17.02 trillion from a cash capital injection and Rp 6.65 trillion through the conversion of shareholder loans, demonstrating a multifaceted approach to bolstering the airline’s finances.
The company has explicitly stated that the entirety of the funds generated from this Private Placement will be strategically deployed to fortify its operations and significantly improve Garuda Indonesia‘s overall financial standing.
A substantial 37 percent of these newly acquired funds will be allocated directly to Garuda Indonesia‘s working capital and core operational costs, crucial for sustaining daily functions. This allocation specifically includes vital payments for aircraft maintenance and repair costs, ensuring the safety and efficiency of its fleet.
The remaining 63 percent is earmarked for a crucial capital increase in Citilink, Garuda Indonesia‘s low-cost subsidiary. This will be achieved through a combination of converting shareholder loans into equity and direct cash capital injections. Furthermore, these funds are critical for enabling Citilink to settle its USD 225 million fuel debt to Pertamina and to support ongoing aircraft maintenance, thereby ensuring the optimal and uninterrupted operation of the subsidiary.
Garuda Indonesia emphasizes that this current Private Placement represents a vital phase in its ongoing financial restructuring efforts, building upon the significant overhaul initiated in 2022. During that previous large-scale restructuring, the state-owned airline successfully slashed its total debt from a staggering USD 13.3 billion to USD 7.7 billion and notably improved its equity position from a negative USD 6.1 billion to a negative USD 1.5 billion.
Despite these prior achievements, as of June 30, 2025, Garuda Indonesia continued to report a negative equity of USD 1.49 billion, alongside a challenging debt-to-asset ratio of 123 percent. This highlights the persistent need for further capital strengthening.
The proposed new share issuance is scheduled for deliberation at an Extraordinary General Meeting of Shareholders (EGM) on November 12, 2025. The company has assured stakeholders that this crucial step has already secured the necessary endorsements from BP BUMN (Indonesia’s State-Owned Enterprises Ministry) and the President of Indonesia, as evidenced by a formal restructuring approval letter.
Importantly, management clarified that this transaction will not alter the company’s controlling ownership. This is because DAM is an affiliated entity and an integral part of the internal restructuring framework for state-owned enterprises (BUMN), ensuring strategic alignment.
Following the successful execution of the Private Placement, Garuda Indonesia anticipates a significant turnaround in its financial health. The airline projects its equity will reach a positive USD 183 million by the end of 2025, a dramatic improvement from its current negative standing. Furthermore, the current ratio is expected to substantially increase from 0.44 times to a much healthier 1.22 times, indicating improved liquidity.
“The implementation of this PMTHMETD by DAM is expected to deliver a profound positive impact on the improvement of our capital structure, enhance liquidity, and ultimately bolster the long-term sustainability of the company’s business operations,” stated Garuda Indonesia, underscoring the strategic importance of this financial maneuver for its future trajectory.
Summary
Garuda Indonesia (GIAA) is set to issue 315.61 billion Series D shares through a Private Placement, aiming to raise approximately USD 1.5 billion. This capital increase, with PT Danantara Asset Management acting as a key investor and creditor, will be achieved through a combination of a cash capital injection and the conversion of shareholder loans. The funds are intended to fortify Garuda’s operations, significantly improve its overall financial standing, and continue its ongoing financial restructuring.
A substantial 37 percent of these funds will be allocated to Garuda’s working capital and aircraft maintenance, while the remaining 63 percent will be used for a capital increase in its subsidiary Citilink. This allocation for Citilink will help settle its USD 225 million fuel debt to Pertamina and support ongoing aircraft maintenance. Following this transaction, Garuda projects a significant turnaround, anticipating positive equity of USD 183 million by the end of 2025, along with an improved current ratio, enhancing its long-term business sustainability.