PT Supra Boga Lestari, which runs Ranch 99 Market and Farmers Market retail outlets, is looking to collect between Rp 135 billion ( US$14 million ) and Rp 159 billion in an initial public offering ( IPO ), aiming to open four new stores this year.
The company previously aimed to raise between Rp 200 billion and Rp 300 billion by offering a 20 percent stake, or 312 million new shares, but Kresna Graha Securindo as the underwriter for the initial shares offer valued the company’s stock at between Rp 425 and Rp 510 apiece.
Supra Boga president director Nugroho Setiadharman said on Monday that despite the downsize, the proceeds were enough for the company’s expansion plans.
“One Ranch Market in Balikpapan will open in June and three Farmers Market, located in Tangerang, Bekasi and Bogor, are set to open in the third or fourth quarter of this year,” Nugroho told reporters.
Sixty percent of the IPO proceeds will go out for the four new stores, while the remaining 21 percent and 19 percent will respectively be spent on debt repayment for PT Bank CIMB Niaga ( BNGA ) and on working capital, which should ease Supra Boga in realizing its expansion plans.
Supra Boga will offer the initial shares from June 1 to June 4 and is expected to list its shares on the Indonesia Stock Exchange on June 7.
The company currently operates 14 stores in Jakarta and Surabaya, comprising nine Ranch Markets —
a franchise of Ranch Market USA — and five Farmers Market stores.
Supra Boga has aimed to open five more branches next year, including one in Bali, and will be focusing more on adding Farmers Market outlets rather than Ranch Market, due to the demographics of Indonesian citizens.
“Farmers Market is targeting the middle and upper class, while Ranch Market is for the upper class and expatriates. Of course we would reach more customers with Farmers Market,” Nugroho said.
Each outlet will cost Supra Boga between Rp 8 billion and Rp 14 billion, depending on the location and concept of the store, according to him. “For instance, if we have a full restaurant concept like the one in Grand Indonesia or Pesanggrahan, it will cost up to Rp 14 billion.”
Founded in 1997 as a franchisee of Ranch Market USA, Supra Boga booked Rp 900 billion in revenue and Rp 21 billion in net profit in 2011 and expected to increase the bottom line by up to 30 percent this year.
Ranch Market Indonesia has had its own flag since 1998 after riots driving the American firm to leave the country.
Supra Boga is currently 36.5 percent owned by PT Wijaya Sumber Sejahtera, 26 percent by PT Prima Rasa Inti, 21 percent by PT Gunaprima Karya Perkasa and 10.5 percent by PT Ekaputri Mandiri. The remaining 6 percent stake is individually owned by Dr. David Kusumodjojo. ( nad )