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teel pipe producer PT Steel Pipe Industry of Indonesia, known as Spindo, is planning to raise funds from selling new shares to the public to finance its expansion.

The company said on Monday it would offload 2.9 billion new shares that would account for 40.36 percent of its enlarged capital, priced at between Rp 260 (3 US cents) and Rp 390 apiece, which could see the company collect somewhere in the range of Rp 754 billion to Rp 1.13 trillion from the initial public offering (IPO).

Spindo, which was established in 1971 as a joint venture between Itochu Corp. and Kawasaki Steel, has appointed PT Andalan Artha Advisindo Sekuritas as underwriter for the issuance. The company, which also provides steel coating and shearing services, will hold the offering period for its IPO on Feb. 14 to 18 and is expecting to list its shares on the Indonesia Stock Exchange (IDX) on Feb. 22.

Proceeds from the IPO will be used as capital expenditure, working capital and to pay debts to Indonesian Eximbank of Rp 205 billion.

For its expansion, Spindo requires Rp 730 billion for developing a new factory called the Spindo Gresik Factory (SGF), purchasing and installing new machines including for factory unit V in Karawang, repairing machinery in Rungkut Industri I and II Warugunung in Surabaya as well as in Pasuruan, expanding the Karawang factory, land acquisitions and for relocating its factory from Pasuruan to Gresik. The company also needs Rp 765 billion for its working capital.

Spindo currently has five factories in Surabaya and Pasuruan in East Java and Karawang in West Java on a combined area of 268 hectares. According to its prospectus published on Monday, the company expected to obtain Rp 1.7 trillion from the IPO.

As the estimated fund to be raised from IPO was Rp 1.13 trillion, Spindo said it would use bank loans and internal cash for its expansion.

“Our focus is on increasing machine capacity. Relocation will be set aside for a while,” said vice president director Tedjasukmana Hudianto.

Tedjasukmana said that Spindo targeted to book up to Rp 4 trillion in revenue this year, increasing by about 33 percent compared to an estimated Rp 3 trillion in revenue in 2012. The company’s profit before tax is estimated to stand at around Rp 300 billion this year, increasing significantly from an estimated Rp 124 billion in 2012.

Spindo is majority owned by PT Cakra Bhakti Para Putra with 93.8 percent. Other shareholders include Pandu Lokiswara Salam (1.17 percent), Nugraha Salam (1.17 percent), Yaman Salam (0.92 percent) and the heir of Tjahjono Tedjo Koesoemo (2.95 percent).

Another company to hold an IPO is shipping company PT Trans Power Marine (TPM), which expects to bring in up to Rp 98.75 billion from the offering, scheduled next month.

TPM would release 395 million shares, or 15 percent of its enlarged shares, during the IPO at a price range of between Rp 220 and Rp 250 per share, the company announced in Jakarta on Monday.

PT BCA Sekuritas will act as the sole underwriter for the IPO, which will take place on Feb. 12 and 13. TPM says it hopes to list the shares on the IDX on Feb. 18.

Currently TPM mainly provides transportation services to the coal industry. Coal accounts overwhelmingly for its revenues at 96 percent, followed by clinker, for cement manufacturing, at 4 percent.

BCA Sekuritas president director Mardy Sutanto said it was now the perfect time for TPM to go public, citing significant growth in the local coal industry in the last five years. “Coal demands will continue to increase and that will bring benefits to the coal transportation business,” he said.

The IPO proceedings will be used to finance about 30 percent of its capex budget this year, while the remaining 70 percent will be provided by bank loans. According to TPM finance director Rudy Sutiono, the company will allocate between $30 million and $40 million for this year’s capex to purchase between four and seven new tug-and-barge sets.

Based on its latest financial report up to September 2012, TPM’s revenues climbed 24.3 percent to $37.04 million, due to new contracts it secured during the nine-month period. However, its comprehensive profits fell 4.5 percent to $6.57 million as it faced increasing costs from tug-and-barge rentals.