ASSESSMENT OF THE RIGHT ISSUE PLAN TO IMPROVE CAPABILITIES OF PT. GARUDA MAINTENANCE FACILITY AEROASIA TBK

• Main Author: SALMAN/ 29116470, RISYAD
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/30548
• Institution: Institut Teknologi Bandung

PT. Garuda Maintenance Facility AeroAsisa Tbk (GMF) planned to issue 10 percent of its new share through private placement for PT.XYZ in order to improve its capabilities and transfer knowledge which called as strategic investor. PT XYZ could extend its market in Indonesia. This issuance of new share is aimed to be capital source of GMF in upgrading new capabilites for its business segment line and working capital. From this action, it can lower the operating expenses especially in cutting off sub-contract expense and it hopefully affects the growth of company’s financial performance. <br /> <br /> The objective of this research is to assess the issuance of new share; whether it gives positive effects for the company financial performance and it also assses whether the share value can attractively invite investors in the secondary market. This research is supported with external environment analysis such as PESTEL and Porter Five Forces to determine the current situation of MRO industry, and also internal analysis of company in terms of tangible and intangible resources. From those two analysis it will determine the SWOT of company has. For the valuation methods, this research uses two methods which are absolute and relative valuation model. The absolute valuation model uses The Free cash Flow of The Firm (FCFF) and relative valuation uses The Price-to-Earning Ratio (PER). <br /> <br /> Based on the historical performace of revenue growth of company, it shows that the Compounded Annual Growth Rate (CAGR) is 18% from 2013 to 2017. This growth is used as the calculation assumption where the company runs its business performance like how it used to be. There are two scenarios on this research. The first one is that the company does not issue the 10% new shares with there is no capability improvement and the second scenario when the company issues 10% of new shares to improve capabilities. Based on the calculation of the second scenario with issuance 10% new shares, the absolute valuation shows instrinsic value with Rp 308 with potential growth 47% compared to the current price of Rp210, while on the first scenario, the summary shows only potential growth of 36% with Rp285intrinsic value, both are considered cheaper by the market or undervalued. From the relative valuation, after the issuance of new shares, the EPS in 2018 decreased compared with the scenario when the company does not do the corporate action plan due to incremental outstanding shares. From the valuation above, it clearly shows that company should issue 10% of new shares in order to improve capability that leads to higher shareprice. The recommendation suggested by this research is the BUY recommendation, especially after GMF done the corporate action plan <br />