Monday, January 08, 2007

Air Canada also vying for Garuda

There are at least four companies that will compete to be the strategic partner of ailing flag carrier PT Garuda Indonesia Airways. They are Texas Pacific Group (TPG)/Newbridge, Lufthansa, Air Canada and one name I don't know.

Other names have been mentioned before such as KLM, Thai Airways, Emirates, or Qantas. "There will no preferred bidder. Government want a competitive bidding," people close to Garuda said.
While state-owned enterprises ministry repeatedly expressed its preference for IPO of SOEs, in Garuda's case, strategic partner is the preferred choice because the company has yet to accomplish its restructuring. "IPO is not a choice. Garuda have to restructure its debts," he said.
But when I asked whether the cabinet is solid on the strategic partner option, he said, "so far, yes. But we're not sure."
MSOE Sugiharto had announced the plan to privatize Garuda Indonesia many times. In 2005, Sugiharto said Garuda to be privatized in 2006. We're in 2007 now. And I could imagine stiff competition and possible strong opposition from certain groups (management, workers union, political parties, pressure groups etc).




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