PTPN VII expects to raise Rp 2.5 trillion from IPO

November 05, 2014, 11.44 AM | Source: The Jakarta Post
PTPN VII expects to raise Rp 2.5 trillion from IPO

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BANDAR LAMPUNG. State-owned plantation firm PT Perkebunan Nusantara VII (PTPN VII) is preparing itself for an initial public offering (IPO) plan next year to support expansion and strengthen its capital structure.

PTPN VII finance director Agoes Riyanto said the company expected to raise about Rp 2.5 trillion (US$206.39 million) from the sale of 30 percent of the company’s enlarged shares.

PTPN VII, along with other state plantation companies PTPN V and PTPN VII, were required to postpone their IPO plans since last year pending clarification of the government’s plan to establish a plantation holding company.

Agoes said PTPN VII revisited the IPO plan after the government finally named PTPN III in Medan as a holding company to directly own and manage the state plantation firms in early October.

Agoes said that the State-Owned Enterprises Ministry and PTPN III as the holding company had decided to choose PTPN VII as the first company to hold the IPO next year, Agoes added.

“We are quite ready because we have had a prepared plan for a couple of years,” he said on Tuesday.

PTPN VII, which produces palm oil, sugar, tea and rubber, initially planned in 2008 to offer about 30 percent of its stake in an IPO in a bid to collect as much as Rp 1.5 trillion from the public.

This time, Agoes said the company expected to conduct the IPO in the second quarter of next year, or between April and June. The company would appoint securities companies and other institutions as underwriters and trustees for the next phase of the plan, he said.

Previously, PTPN VII corporate secretary Sonny Soediastanto said that State-Owned Enterprises Minister Dahlan Iskan had agreed to the IPO option, the process of which was still at an early stage.

Agoes added the company was convinced that its performance would be better after it became publicly listed because that would lead to a more transparent management and better compliance to good corporate governance.

“We have implemented several strategic policies internally, such as optimizing resources on capital, financial, personnel and systems as well as partnerships and the environment,” he said.

Agoes said the company’s assets had increased significantly in the last three years and were currently posted at Rp 9 trillion.

As of last year, PTPN VII’s financial health was rated A, according to the SOEs Ministry’s data.

The firm booked a 6 percent increase in total sales to Rp 4.6 trillion last year from Rp 4.3 trillion in 2012. The firm’s bottom line surged by 44.7 percent to Rp 78.6 billion from Rp 54.3 billion in 2012.

The company owns 35,000 hectares of rubber plantations, 60,000 hectares of palm oil, 25,000 hectares of sugarcane and 1,500 hectares of tea in Lampung, South Sumatra and Bengkulu.

Aside of that, the company operates 10 manufacturing facilities for rubber, seven for palm oil, two for sugar and one for tea.

The Indonesia Stock Exchange (IDX) expects at least 35 companies will list their shares on the exchange next year despite the decline in the interest to conduct initial public offerings this year.

IDX president Ito Warsito said recently he was optimistic that the target would be achieved as the market would likely improve, giving companies a more conducive opportunity to list their shares.

The exchange expects the number of new listings would reach 25 this year, below this year’s initial target of 30 companies.

Ito said that a number of companies decided to delay their IPOs because the market conditions were not “so favorable”, as well as because of political uncertainties during the general elections in the middle of the year. The number of new listings only reached 18 companies as of October, but the exchange is optimistic there would be at least seven new listings before the year’s end. (Oyos Saroso H. N.)

Editor: Hendra Gunawan

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