Greenwood price falls at market debut

Property developer PT Greenwood Sejahtera (GWSA) is preparing to acquire 3.2 hectares of land near its current project of The City Center – Batavia despite the company missing its target to raise Rp 1 trillion (US$110 million) from its recent initial public offering (IPO).

Greenwood formally listed its shares on the Indonesia Stock Exchange (IDX) on Friday following the company’s IPO last month. During the company’s stock market debut, its share price increased 12 percent to Rp 280 from its IPO price of Rp 250 during morning trading. However, it failed to maintain the increase in the afternoon as the shares fell to Rp 240. By the close of trading, the shares had fallen 18 percent to Rp 205.

“We are committed to the IPO proceeds to acquire 3.2 hectares of land to support the development of The City Center – Batavia,” Greenwood Sejahtera director of finance Bambang Dwi Yanto said after his company’s listing.

“We will realize the acquisition soon. We have to wait for funds from the IPO because we cannot use bank loans to acquire land. Banks only extend loans for construction,” Bambang added.

The company is completing The City Center-Batavia integrated superblock located on Jl. K.H. Mas Mansyur, Central Jakarta. The City Center – Batavia will have seven towers, consisting of three office towers, three residential towers and one multipurpose tower. The project, the construction of which will be done in three phases, is scheduled to be completed by 2017 with a total investment of Rp 4.8 trillion.

Greenwood Sejahtera has completed 44 percent of the construction of the first of the three office towers built on 2.2 hectares of land. The first tower is scheduled to be completed in 2012, when the company plans to start construction on the other two office towers, which are scheduled to be completed in 2014.

“There will be no problem supporting the development of the two office towers as we still have financing from Bank Niaga and revenue from sales of units of the first office tower,” Bambang said.

The company secured Rp 400 billion in loans from Bank Niaga, and is using Rp 170 billion of the total amount for the construction of the first tower, Greenwood Sejahtera corporate secretary Linda Halim said.

“We will use the remaining funds to build the second and third office towers. We will rely on revenue from sales and financing from banks to support the completion of The City Center – Batavia by 2017,” Linda said. (rcf)