The giant cigarette producer HM Sampoerna wants Rp 20
he giant cigarette producer HM Sampoerna wants Rp 20.77 trillion (US$ 1.5 billion) of net cash through the biggest rights offering to be held in Southeast Asia, after the company cut 4,900 employees due to efficiency two years ago.
HM Sampoerna CEO Paul Norman Janelle said the company would issue 269.72 million new shares, priced at Rp 77,000 per unit, and had launched a worldwide roadshow to offer the new shares.
'We expect to attract more foreign investors to be our shareholders, and buying the stock in Indonesia,' he said, as quoted by tempo.co in Jakarta on Friday.
The proceeds, he continued, would be used to add to the company's working capital, and ultimately would be spent on the company's operational expenses such as adding to tobacco and cloves stockpiles.
Paul further said that the initial offering had attracted local and foreign investors. Offshore capital to buy Sampoerna shares needs to be converted to rupiah, as a capital inflow, which would support Indonesia's economy and capital market.
The rights issue is part of Indonesia Stock Exchange's (IDX) requirement that obliged all the listed companies to have at least 7.5 percent of the company's shares traded in the market.
A state-owned brokerage house, Mandiri Sekuritas, acted as the lead underwriter of this corporate action.
In the meantime, Paul regretted the fact that the company had to layoff 4,900 employees due to the closing of two of the company's factories two years ago. "My heart is broken," he said in the press conference in Sampoerna's office.
He said that the company did not abandoned its former employees, and had given compensation as well as training to assist them to make a living after the layoff.
Currently, Sampoerna has 29,800 permanent employees and 48,000 others, who work for its cigarette producing partners. "For this year, Sampoerna has no plans to build a new factory." (ags/bbn)
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.