T

he country'€™s largest heavy equipment distributor, United Tractors, is looking to conclude the acquisition of publicly listed Acset Indonesia in the hopes of purchasing another 10 percent stake in the construction firm to own 50 percent of shares in the company.

United Tractors corporate secretary Sara K. Loebis said her company was awaiting approval from the Financial Services Authority (OJK) to offer a bid for 10 percent shares of Acset Indonesia, expecting the transaction to reach a deal this month.

'€œWe are aiming for 50 percent ownership of Acset,'€ Sara said.

United Tractors, which is part of diversified conglomerate Astra International Indonesia, closed a stock crossing transaction for a 40 percent stake in Acset on Monday.

The transaction involved 200 million shares of Acset, priced at Rp 3,250 (25 US cents). Thus, United Tractors '€” through its subsidiary Karya Supra Perkasa '€” acquired the stakes of the construction firm for Rp 650 billion.

Sara refused to disclose the estimated price for the bidding offer for a 10 percent stake in Acset. However, if the transaction was made at a similar price with the previous transaction, United Tractors might have to disburse another Rp 162.5 billion to forge a purchasing deal.

'€œAll the money needed for acquiring Acset is sourced from our own internal cash,'€ she said.

Sara said the company decided to acquire Acset in hopes of gaining momentum from the country'€™s expected infrastructure growth in the upcoming years.

'€œAcset has performed well and is an experienced firm in the industry, especially in building foundations. We have yet to estimate how much Acset might contribute to our revenue this year because it might be insignificant from now on,'€ she said.

'€œWe expect a greater return later on and there is also the possibility of creating synergy between Acset and other Astra'€™s business lines,'€ she added.

United Tractors took over shares of Acset from the builder'€™s controlling owners, Cross Plus Indonesia and Loka Cipta Kreasi, which held 38.45 percent and 29.75 percent of shares in the construction firm prior to the acquisition, respectively.

Acset went public last year with 30 percent of its enlarged capital or around 500 million shares offered to the public. According to its January-September books, its total assets stood at Rp 1.40 trillion.

Acset saw its revenue increase by 45.37 percent year-on-year to Rp 857.66 billion in the first nine months while its net profit rose by 47 percent to Rp 69.09 billion.

Meanwhile, United Tractors registered a 9.41 percent increase in consolidated revenue to Rp 40.81 trillion and a 41.12 percent increase in net profit to Rp 4.77 trillion.

Shares in Acset '€” listed under the code ACST on the Indonesia Stock Exchange (IDX) '€” rose by 1.37 percent to end at Rp 3,700 on Monday, after the transaction concluded. The shares slipped 2.7 percent to close at Rp 3,600 on Tuesday.

Shares in United Tractors '€” listed under the code UNTR '€” closed 2.45 percent lower on a daily basis to end at Rp 16,875 on Monday, before climbing to Rp 16,950 on Tuesday.

United Tractors director Edhi Sarwono previously said the company hoped to seek additional income from the construction sector '€“ both by having its own construction firm and by boosting heavy equipment sales to construction companies.

The company faces slowing business as coal prices remain bearish. The company operates a coal mining contractor and coal mining businesses. Most of its heavy equipment is also sold to coal miners, who are also suffering from a plunge in coal prices.