PTPN eyes IPO in December as source of funds for expansion

Khairul Saleh , The Jakarta Post , Bandar Lampung | Tue, 09/02/2008 10:15 AM | Business

State-owned plantation company PT Perkebunan Nusantara (PTPN) VII plans to sell part of its stake through an initial public offering (IPO) in December in a bid to expand production capacity.

The company will sell 30 percent of its value in the IPO, in which it targets to clinch as much as Rp 1.5 trillion (US$165 million) in proceeds.

PTPN corporate secretary Budi Santoso said Monday the proceeds would be used to revitalize the company's business, purchase new land and plant more crops.

The proceeds of the IPO will also be used to boost production capacity at the company's sugar refineries in Cintamanis, South Sumatra, to 7,000 tons per year from the existing 4,000 tons.

The production capacity of its refineries in Bungamayang, Lampung, will be increased to 10,000 tons from 5,500 tons.

The Bandar Lampung-based company will expand its plantation areas by 10,000 hectares for rubber, 8,500 hectares for palm oil and 6,800 hectares for sugar canes.

PTPN currently has 62,713 hectares of palm oil plantations, 55,617 hectares of rubber, 18,780 hectares of sugar cane and 1,580 hectares of tea plantations in Lampung and Palembang, South Sumatra.

Budi said the company was in the process of securing approval for the IPO from the House of Representatives.

The company, which employs 16,218 permanent workers, is targeting a Rp 500 billion net profit this year, or up 253 percent from last year. Its total assets are valued at Rp 2.4 trillion.

State-owned plantation companies PT PTPN III and PT PTPN IV are also slated to sell stake this year.