PT Hotel Mandarine Regency, owners of the four-star Goodway Hotel in Batam, will sell up to 24.79 percent of its shares through an initial public offering (IPO) in May, hoping to raise up to Rp 45 billion (US$4.89 million) in proceeds.

Hotel Mandarine Regency plans to sell 300 million shares for between Rp100 and Rp 150 each, and 198 million series I warrants.

"Half of the IPO proceeds will go towards the renovation of rooms and facilities, PT Overseas Securities investment banking director Rudy Tuahunse said Monday.

"Up to 30 percent will be for the development of a shopping arcade inside the hotel, ballrooms and luxurious stores and 20 percent for working capital," added Rudy, underwriter of the IPO.

"We expect to raise our net profits by 163.87 percent, to Rp 4.13 billion this year," Mandarine Regency Hotel president director Djonny Mardjuki said.

Last year the company booked a Rp 1.56 billion profit, company data shows.

"We are very optimistic about reaching our net profit goal this year as we see investments in the Batam Free Trade Zone (FTZ) area are growing rapidly," Rudy said.

Since 29 June 2007, the government has given full FTZ status to Batam and enclave status for neighboring islands Bintan and Karimun. According to the plan, Batam will be transformed into a shipyard and electronic industrial development center.

The 271-room hotel had a stable occupancy rate of around 60 percent annually, with corporate clients contributing 95 percent. (rff)

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