Perum Pegadaian is preparing an initial public offering (IPO) this year after obtaining government approval to change its status to a full business entity from a government-owned company, known locally as Perum.
Pegadaian finance director Budianto said on Wednesday that Pegadaian’s new business entity status was now official with the issuance of Government Regulation No 51/ 2011 on Dec. 13.
“Now, we will try to carry out the IPO this year, in the second half at the earliest,” he said.
The Indonesia Stock Exchange (IDX) requires a company to be a full business entity or a limited liability company (PT) before floating its shares on the bourse.
“Pegadaian and State-owned Enterprises Ministry are carrying out the next stage of adjusting the company’s balance sheet at the closing of 2011 and opening a new balance sheet for 2012 as a PT,” Budianto said.
He said that the adjustment process would be completed by the middle of March.
“After that, we will submit articles of association and deed of establishment of a PT to the Law and Human Rights Ministry. When the ministry approves our request, the status of PT will be effective and we will prepare for the IPO,” Budianto said.
He added that Pegadaian had yet to decide the number of shares to be offered and the targeted capital to be raised during the planned IPO.
Budianto said Pegadaian would use the funds from the IPO as working capital.
Previously, Pegadaian president director Suwhono said his company needed up to Rp 7 trillion (US$763 million) this year to support its lending. Pegadaian usually uses bank loans and funds from bonds issued to support its lending.
Pegadaian issued bonds worth Rp 1 trillion last year. The company is planning to issue more bonds this year.
“If we carry out the IPO this year, there will be adjustments in the company’s financing sources,” Budianto said.
An analyst from PT Universal Broker Indonesia, Satrio Utomo, said that Pegadaian’s IPO would make the capital market more interesting as the company would be the first pawnshop to float its shares on the IDX.
“We don’t know how many shares the company will sell on the stock market. We cannot compare Pegadaian with other companies listed at the IDX. However, I see that Pegadaian has a chance to be a blue-chip company,” Satrio said. (rcf)