MARKET DEVELOPMENT
Sawit Sarana to Raise Rp 1.45t From IPO Next Month
Sawit Sarana to Raise Rp 1.45t From IPO Next Month
09/11/2013 (Jakarta Globe) - Sawit Sumbermas Sarana, a unit of plantation company Citra Borneo Indah, expects to raise up to Rp 1.45 trillion ($127 million) through a December initial public offering.
In a meeting with journalists on Thursday, Iman Rachman, managing director of Mandiri Sekuritas — one of the underwriters for the planned IPO — said the company would sell as much as 1.5 billion new shares, or 15.7 percent of its enlarged capital, in an IPO next month.
The company plans to boost its crude palm oil production with the proceeds and has set the indicative price for the IPO in the range of Rp 670 to Rp 970 a share.
That would give Sawit fresh funds of between Rp 1 trillion and Rp 1.45 trillion.
The share offer will run from Dec. 3-5, with a planned listing on the Indonesia Stock Exchange (IDX) on Dec. 12.
Besides Mandiri Sekuritas, the other underwriters in the endeavor include BNP Paribas Securities Indonesia and RHB OSK Securities Indonesia.
Sawit is a unit of CPO producer Citra Borneo, which has been reported as wanting to sell at least part of its stake through an IPO since 2011.
However, the company has continually delayed its plans, citing unfavorable CPO market conditions.
Sawit will use 60.5 percent of the IPO proceeds to develop its existing plantation area, build new palm oil mills and acquire new plantation area.
Twenty-five percent of the proceeds will be used to pay off its debt and the remaining 14.5 percent will be used as working capital.
Rimbun Situmorang, president director of Sawit, told reporters that the company controlled a total of 78,071 hectares of plantation area through its subsidiaries in Central Kalimantan. Of that total, only about 33,000 hectares have been cultivated.
“Our plan is to cultivate about 5,500 hectare per year. Meanwhile, we will continue to look for potential acquisition targets,” said Rimbun, who is also the chief executive of Citra Borneo.
Harry Nadir, the finance director at Sawit, added the company would build new palm oil processing mills to support expanding palm fruit production.
The company currently has four palm oil mills with a combined processing capacity of 240 metric tons per hour.
Harry added that the company was aiming to increase its revenue and net income by 10 percent to 15 percent this year. In the first half this year, it posted Rp 180 billion in net income, a 15 percent increase from a year earlier.
Rimbun said he believed the IPO would be successful despite demand for listed CPO companies not at its strongest amid declining profit on lower CPO prices and rising production costs in the industry.
“We have a strong enough fundamental condition and we are one of the best in the industry in our production and cost management,” he said.
Earlier this year, plantation company Dharma Satya Nusantara cut its IPO size to 13 percent of its capital from the originally planned 21 percent. Dharma’s share price closed at Rp 1,880 on Thursday.
In a meeting with journalists on Thursday, Iman Rachman, managing director of Mandiri Sekuritas — one of the underwriters for the planned IPO — said the company would sell as much as 1.5 billion new shares, or 15.7 percent of its enlarged capital, in an IPO next month.
The company plans to boost its crude palm oil production with the proceeds and has set the indicative price for the IPO in the range of Rp 670 to Rp 970 a share.
That would give Sawit fresh funds of between Rp 1 trillion and Rp 1.45 trillion.
The share offer will run from Dec. 3-5, with a planned listing on the Indonesia Stock Exchange (IDX) on Dec. 12.
Besides Mandiri Sekuritas, the other underwriters in the endeavor include BNP Paribas Securities Indonesia and RHB OSK Securities Indonesia.
Sawit is a unit of CPO producer Citra Borneo, which has been reported as wanting to sell at least part of its stake through an IPO since 2011.
However, the company has continually delayed its plans, citing unfavorable CPO market conditions.
Sawit will use 60.5 percent of the IPO proceeds to develop its existing plantation area, build new palm oil mills and acquire new plantation area.
Twenty-five percent of the proceeds will be used to pay off its debt and the remaining 14.5 percent will be used as working capital.
Rimbun Situmorang, president director of Sawit, told reporters that the company controlled a total of 78,071 hectares of plantation area through its subsidiaries in Central Kalimantan. Of that total, only about 33,000 hectares have been cultivated.
“Our plan is to cultivate about 5,500 hectare per year. Meanwhile, we will continue to look for potential acquisition targets,” said Rimbun, who is also the chief executive of Citra Borneo.
Harry Nadir, the finance director at Sawit, added the company would build new palm oil processing mills to support expanding palm fruit production.
The company currently has four palm oil mills with a combined processing capacity of 240 metric tons per hour.
Harry added that the company was aiming to increase its revenue and net income by 10 percent to 15 percent this year. In the first half this year, it posted Rp 180 billion in net income, a 15 percent increase from a year earlier.
Rimbun said he believed the IPO would be successful despite demand for listed CPO companies not at its strongest amid declining profit on lower CPO prices and rising production costs in the industry.
“We have a strong enough fundamental condition and we are one of the best in the industry in our production and cost management,” he said.
Earlier this year, plantation company Dharma Satya Nusantara cut its IPO size to 13 percent of its capital from the originally planned 21 percent. Dharma’s share price closed at Rp 1,880 on Thursday.