The main reasons behind Sempati Air's delayed initial public offering have now emerged as its deteriorating financial situation and the resulting top management shakeup. These events do not appear to have dampened Singapore Airlines' interest in taking a stake in the Indonesian private carrier.
'Discussions are continuing' about a stake in Sempati, confirms SIA. First indications of these talks came in December after Sempati said it was postponing its IPO, blaming local investor preoccupation with the US$400 million privatisation of Indonesia's national bank, Bank Negara Indonesia.
Then Sempati disclosed it was replacing the company's president-director, Hasan Soedjono, and making other senior management changes because of the airline's poor finances. Indonesia's credit rating agency has issued a rating alert on Sempati's commercial paper because of 'liquidity and leverage conditions.'
Soedjono, who had been at the helm for over six years and was credited with raising the carrier's profile, has been replaced by Santun Nainggolan, director of a Jakarta securities firm. The shakeup has also brought in new directors for finance, operations and commercial.
Nainggolan maintains the carrier's problems are short term and that the IPO, aimed at raising US$100-150 million, can still go ahead this year.
SIA, which is also eyeing an Indian venture with Tata (see p20), has not said how large a stake it is seeking. Indonesian law restricts foreign ownership to 49 per cent. Last April Sempati privately sold 40 per cent of its shares to Asian Aviation, an Indonesian-Malaysian joint venture majority owned by Indonesians.
Source: Airline Business
