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ne of the existing shareholders of Southeast Asia's largest textile company, PT Sri Rejeki Isman, plans to sell its ownership share after the company completes its initial public offering (IPO).

Sri Rejeki Isman, commonly known as Sritex, said on Thursday that Estrada Trading Ltd., which currently holds 2.56 billion shares or 19.68 percent ownership in the textile firm, would sell its stake through private placement to long-term international investors, hedge funds and wealth management institutions.

Estrada would perform the private placement within three months of listing the shares on the Indonesian Stock Exchange (IDX), Sritex said.

Estrada's divestment is aimed at cashing in on the former's investment in the textile company. Placement price would be based on market price, it said.

Sritex plans to enter the capital market this June to raise expansion funds. It was recently reported that the company was seeking up to US$154 million, according to Reuters. The company will sell 5.6 billion new shares, which will account for 30.12 percent of its enlarged capital in the IPO. The company, which has appointed PT Bahana Securities as its underwriter for the IPO, will kick off its bookbuilding period May 20-28 and start its offering period June 10-12. Shares will be listed on the IDX June 17.

'As much as 87 percent of funds raised from the offering will be used to expand our spinning factory while the remaining 13 percent will go to our garment factory,' the company said in a public announcement on Thursday.

Sritex was founded in 1966 by local entrepreneur Haji Muhammad Lukminto in Surakarta, Central Java. The company is now a major textile exporter and the main supplier of military uniforms to more than 30 countries.

The company had Rp 3.55 trillion ($366 million) in total assets as of the end of December last year, with liabilities and equity amounting to Rp 2.23 trillion and Rp 1.32 trillion respectively. Sritex reaped Rp 2.85 trillion in net sales last year, increasing by around 23 percent from a year earlier. Its net profits stood at Rp 229.31 billion in 2012, increasing 42 percent from Rp 161.45 billion year-on-year.

Besides Estrada, Sritex is currently 80.24 percent owned by PT Huddleston Indonesia and 0.07 percent by Lukminto. After the IPO, Huddleston's ownership will be reduced to 56.07 percent, Estrada's to 13.76 percent and Lukmito's to 0.05 percent. Huddleston has a 8-month lock up period.

Last year, Sritex entered into a cooperation deal with China's China Hi-Tech Group Corporation to jointly develop a container port and integrated industrial zone in Sukoharjo, southern Central Java. The two firms plan to invest up to $6 billion in the project. Under the agreement, the Chinese company will develop cement factories while Sritex will build a textile factory in the planned industrial estate.

However, the realization of the plan is still pending on the government's permits, according to Sritex general affairs manager Sri Saptono Basuki.

'We anticipate many benefits from the projects, including cost savings,' We currently export products through Tanjung Emas Port but we would save on time if we had a port in Wonogiri,' Basuki said on Thursday.