Indonesia's flag carrier PT Garuda Indonesia plans to raise up to $400 million in an initial public offering in June next year to fund its expansion.

The raised amount will be used to pay its debt, strengthen its capital structure and for carrying out expansion plans.

The company officials believe that the IPO would encourage good corporate governance and efficiency, enabling the airline to compete in Indonesia's crowded airline market.

It should be noted that Indonesia's airline industry has been badly hit by several serious accidents in recent years, prompting the European Union to ban all Indonesian airlines from entering its airspace.

Garuda has become one of four Indonesian airlines to be taken off the list of banned airlines recently, following safety improvements. Presently, the company is in the process of restructuring its debts, which it expects to complete in two months.