ASEAN KEY DESTINATIONS
Indonesian plantation firm plans IPO
State-owned plantation company Perkebunan Nusantara III is planning a US$333 million initial public offering in Indonesia this year.
PTPN III president director Amri Siregar told state news agency Antara that it would submit a proposal to the privatization committee this year. A plan to list in 2009 was put off due to an unfavorable market.
"The IPO proceeds would be used to expand our business, and this would also allow our employees to hold the shares. With anequity of around Rp 7.3 trillion, we're expecting to raise an estimated Rp 3 trillion," he said.
About 30 percent of the PTPN's equity may be sold, with as much as Rp 1.8 trillion of the proceeds used for expansion, including construction of an oil palm processing plant in Nanggroe Aceh Darussalam province.
"Along with PTPN I, we will develop 9,300 hectares of oil palm plantations in East Aceh, North Aceh and Aceh Tamiang," he said.
PTPT III also plans to build a Rp 73 billion palm oil processing plant to boost production capacity. Amri said it would be built in South Tapanuli and open in 2014, giving it 12 total factories.
Frederik Daniel Tanggela, an analyst at Sucorinvest Central Gani, said the IPO could be an interesting investment.
"Based on its projections, PTPN III's price-to-earnings ratio is around 7 to 8. This is very cheap compared to the palm oil industry's PE ratio, which stands at around 12 to 14," he said.
However, State Enterprises Minister Mustafa Abubakar said PTPN's share sale would not go ahead until the government created a holding company for the 14 state plantation firms.
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