The Jakarta Post
Wijaya Karya Beton ( Wika Beton ), a subsidiary of state-owned construction company PT Wijaya Karya, is set to sell 23.47 percent of its shares to the public by the end of the month.
The company is hoping to cash in Rp 1.3 trillion ( US$112 million ) from selling 2.04 million shares, which will be priced at Rp 470 to Rp 630 apiece, at the upcoming initial public offering ( IPO ).
'Out of the total funds generated from the IPO, 85 percent will be used to finance our business expansion and the remainder will be used for our working capital,' Wika Beton finance director Entus Asnawi Mukhson told a press conference on Tuesday.
Acting as the company's underwriters are Bahana Securities, Danareksa Sekuritas, Mandiri Sekuritas and Sucorinvest Central Gani.
The IPO will be held on March 26 to 28, before a scheduled listing on the Indonesia Stock Exchange ( IDX ) on April 3.
According to its published prospectus, of the total business expansion funds sourced from the IPO, the company will spend 39.5 percent on construction of Wika Beton's new facilities, 19.4 percent on increasing production capacity at its existing plants, 19.4 percent on purchases of equipment and 18.5 percent on processing raw materials from its quarries.
Entus said the company expected to start construction of four new precast concrete plants in Lampung, Cilegon ( Banten ), Makassar ( South Sulawesi ) and Pasuruan ( East Java ) soon after they secured the IPO funds. Each of the plants will cost the company between Rp 120 billion to Rp 175 billion, and will require up to eight months of construction.
The company is also planning to acquire a precast concrete company in Batam, Riau Islands.
Entus refused to identify the Batam concrete company and how much capital would be spent on it.
He, however, said the company expected to finish the acquisition process, for which it had secured medium-term note ( MTN ) loans worth $366 million as part of the acquisition investment, in the first half of this year.
Entus said the company's precast concrete output was expected to increase by 15 percent from the current 2 million tons to 2.3 million tons per annum, with the construction of the four new plants and the acquisition of the Batam firm.
'We are aiming to boost our market share to 45 percent or possibly even up to 47 percent this year, from our current 43 percent market share,' he said.
'To achieve the target, we need to enhance our production capacity,' he said, adding that Wika Beton was currently leading the country's precast concrete market.
According to its prospectus, the company's assets stood at Rp 2.9 trillion as of December.
The company's operating revenue surged by 30 percent to Rp 2.63 trillion last year, compared to Rp 2.03 trillion in 2012.
Its operating profit rose 45 percent year-on-year to Rp 336.2 billion last year.
Wika Beton recorded Rp 241.21 billion in net profit in 2013, a 34.48 percent rise from Rp 179.37 billion in the previous year.