P

lantation company PT Austindo Nusantara Jaya is preparing to enter the stock market in May to raise funds to support its 2013-2015 expansion plan.

According to an announcement on Tuesday, Austindo will sell 940 million new shares, which will account for 23.86 percent of its enlarged capital, through an initial public offering (IPO).

The company, whose total assets were worth US$399 million as of the end of 2012, did not reveal the price of its shares.

However, the company stated that it would allocate 65.7 percent of funds from the IPO as capital expenditure for its palm oil plantation and processing factory subsidiaries in Ketapang West Kalimantan, land acquisitions, as well as the development of infrastructure and supporting facilities in Empat Lawang, South Sumatra and Maybrat and South Sorong in West Papua.

“The palm oil segment has the biggest allocation of funds from the IPO because the segment is the company’s main business, which will be improved considering the potential of demand,” the company said.

Around 23.3 percent of the funds to be raised from the offering will be used to pay loans from JP Morgan International Bank Limited Brussels Branch.

Meanwhile, about 8 percent will go to building infrastructure and supporting facilities for its sago business, including the completion of a sago flour processing factory with an output of 3,000 tons per month in Saga, Papua, an expansion of the capacity of an existing sago plant to 5,000 tons per month in Metamani, Papua, the development of a wet starch factory and the development of roads, canals and other transportation infrastructure on the subsidiary’s land in Papua.

“The allocation of funds to be raised in this segment is in line with the company’s plan to diversify business in the food sector. The company considers that sago has good prospects,” Austindo said.

The company is also running a power plant business.

It will allocate 2.3 percent of the total funds to be raised from the IPO to complete the 1.2 megawatt biogas power generator on Belitung island and to build a new 1.2 megawatt biogas power plant in a plantation area belonging to its subsidiary, PT Austindo Nusantara Jaya Agri, in Binanga, North Sumatra.

The construction is scheduled to take place sometime between 2013 and 2015.

The company said it would use waste from palm oil processing as raw material for the biogas power plant.

The remaining 0.7 percent of IPO proceeds will be allocated as working capital.

Austindo has appointed PT Bahana Securities as the underwriter for the public offering, in which the book building period will run from April 15 to 24.

Meanwhile, the offering period will be on May 2-3 and a listing on the Indonesia Stock Exchange (IDX) on May 8.

Austindo, which last year pocketed revenue and net profit at $185 million and $96 million respectively, is controlled by the Tahija family.

The late Julius Tahija was the leader of PT Caltex Pacific Indonesia and the major shareholder of Bank Niaga prior to the 1997 financial crisis.

Austindo is currently 44.79 percent owned by PT Memimpin Dengan Nurani, another 44.79 percent-owned by PT Austindo Kencana Jaya, 5.2 percent by George Santosa Tahija, 5.2 percent by Sjakon George Tahija and a small amount by the Yayasan Tahija Foundation.

The company will off load the shares despite lingering uncertainty over the prospects of commodity-based companies, which were suffering from declining selling prices due to the weakening global economy last year.

Stocks of agriculture companies remained lagging behind other sector in the bourse.

According to figures from the bourse on Monday, the agriculture stocks index was the year’s worst performer so far, with a year to date decline of 5.18 percent.