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PTPN III aims to raise Rp 8t through Palm Co IPO this year
The state-owned company currently has around 568,000 hectares of oil palm plantation and has a target to produce 3.08 million tons of crude palm oil (CPO) in 2023.
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A worker loads oil palm fresh fruit bunches onto a truck to be transported from the collector site to CPO factories in Pekanbaru, Riau, on April 27, 2022. (Reuters/Willy Kurniawan)
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tate-owned plantation company PT Perkebunan Nusantara III (PTPN III) has announced that Palm Co, its new subsidiary, which focuses on the palm oil industry, will raise between Rp 6 trillion (US$389.9 million) and Rp 8 trillion through an initial public offering (IPO) in the last quarter of this year.
"The money raised will be used for Palm Co’s business development, in particular to increase the amount of land and production capability," said PTPN III corporate secretary Bambang Agustian on Sunday, as quoted by Kontan.
Palm Co, according to the report, would like to use half of the IPO proceeds to reduce PTPN's debt by accelerating the repayment of master amendment agreement (MAA) debt. The other half would be for capital expenditure.
Meanwhile, the process to establish Palm Co by consolidating plantation units under PTPN III is ongoing. The state-owned firm has appointed Mandiri Sekuritas as the underwriter of the IPO, and McKinsey as the consultant.
Read also: Analyst sees minimal impact on CPO price after Indonesia tightens exports
Today, PTPN III has around 568,000 hectares of palm plantation. It has a target to produce 3.08 million tonnes of crude palm oil (CPO) this year, which would represent a 13 percent increase from last year’s output of 2.72 tonnes.
PTPN III posted Rp 56 trillion in revenue last year, around Rp 35 trillion of which came from the palm oil business.
"This year, we plan to hit Rp 60 trillion in total revenue, with a palm oil contribution of Rp 40 trillion," PTPN III director Dwi Sutoro explained on March 7, as quoted by Bisnis.
Palm Co will be not be the first state-owned enterprises subsidiary to go public this year.
In February, Pertamina Geothermal Energy (PGE) was listed on the Indonesia Stock Exchange (IDX) and raised Rp 9 trillion in the process. The firm, which is the geothermal arm of oil and gas giant Pertamina, plans to use the proceeds as working capital for ongoing operations and future projects.
