PT Arita Prima Indonesia, a producer and distributor of valves, pipe fittings and related equipment, has announced that the company plans to sell 25 percent of its total shares through an initial public offering (IPO) to raise money for business expansion and debt repayments.

The company will hold its book-building period from Oct. 4 to Oct. 8 and list its shares on the Indonesia Stock Exchange (IDX) on Oct. 29.

'The second half of this year is the perfect time for us to sell shares and to go public as the market situation is better,' president director of Arita Prima, Low Yew Lean, said at the due diligence meeting and press conference on Friday.

He said that the company would sell 275 billion new shares in the IPO, seeking to raise funds of between Rp 55 billion (US$4.8 million) and Rp 63 billion. The shares will be offered at between Rp 200 and Rp 230 per share.

The company has appointed PT Lautandhana Securindo as underwriter for the IPO process.

'We've seen this company achieve success in improving its financial performance in the last three years. This will attract potential investors looking to buy Arita Prima shares,' Lautandhana Securindo president director Wientoro
Prasetyo said.

Arita Prima will use 75 percent of the funds raised from the IPO to finance the company's planned business expansion, which includes building six plants in Purwakarta, West Java and other supporting facilities. Arita Prima currently has 8 hectares of land in total, located in Purwakarta.

'We are planning to build more plants in two or three years in the eastern part of Indonesia,' the company's finance director Hery Susanto said.

The other 25 percent of the IPO proceeds will be used to repay the company's short-term loans.

As of April, the firm had total sales of Rp 49.69 billion. Hery added that the company expected sales to reach Rp 180 billion this year, up from last year's Rp 153 billion.

Low said that the company supplied equipment to a wide range of industries ranging from oil and gas companies (10 percent), palm oil producers (40 percent), shipping and building firms (40 percent), and water-related companies (10 percent).

Among Arita Prima's major clients are PT Krakatau Steel, PT Pertamina, PT Pupuk Sriwijaya, PT Samudera Marine Indonesia, and Sinar Mas Group.

The company was founded in 1973 and is based in Jakarta. Arita Prima is a subsidiary of Malaysian Arita Engineering Sdn. Bhd.

Along with Arita Prima, PT Bank Index Selindo, PT Grand Kartech, PT Link Net, PT Sido Muncul, and PT Siloam International Hospitals are all registered to launch IPOs this year, according to data from the Financial Services Authority (OJK). (tam)

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