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Jakarta Post

Capital ventures ready to invest through shares and bonds

Stefani Ribka (The Jakarta Post)
Jakarta
Wed, April 27, 2016

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Capital ventures ready to invest through shares and bonds In this photo, taken on Feb. 24, Russell Gipson Shearer displays on his phone how the start-up company Whistle tracks his pet dog Rocket through San Francisco. Indonesian capital ventures have announced that they are ready to stop promoting profit-sharing as an investment scheme with their investees, and switch to shares or convertible bonds to abide by government demands. (AP/Eric Risberg)

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ndonesian capital ventures have announced that they are ready to stop promoting profit-sharing as an investment scheme with their investees, and switch to shares or convertible bonds to abide by government demands.

Astra Ventura president director Jefri R. Sirait said he was ready to follow the rules and prepare his company to source its funds through different mechanisms. He acknowledged the old method of profit-sharing was simpler, but would not raise as much money as shares or the issuance of convertible bonds.

“Many ventures use their own capital to help investees, but the funds and development are going to be limited compared to that of bonds or shares,” he told journalists at a press briefing in Central Jakarta on Tuesday.

Besides Jefri, other executives have also stated their readiness to abide by the law. They included Eddi Danusaputro, CEO of Mandiri Capital and Rimawan Yasin, a director at Ventura Giant Asia.

A 2015 Financial Services Authority (OJK) regulation, issued last December, stipulates that all capital ventures must use only shares and convertible bonds rather than profit-sharing in their investment schemes. The capital ventures are given three years to adjust their investment scheme to the new rule.

However, as of February, OJK data showed Indonesian capital ventures only channeled Rp 1.4 trillion of their total investment, worth some Rp 7 trillion, under share-issuance schemes. While total investment grew 6 percent, share-based investment did not change from last year.

The majority of the funding was based on profit-sharing schemes, as much as Rp 5.16 trillion. Convertible bonds accounted for only Rp 467 billion. (ags)

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