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Adhi Commuter Properti to raise Rp 3.5 trillion from IPO and bond offering
Adhi Commuter will issue the bonds, sometime in April or May, before launching its initial public offering (IPO) at the end of the second quarter
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Residents try out the LRT at Kelapa Gading Station during the trial period in June, 2019. Property developer PT Adhi Commuter Properti focuses on transit-oriented development (TOD) projects in Greater Jakarta (The Jakarta Post/Jerry Adiguna)
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roperty developer PT Adhi Commuter Properti, a subsidiary of state-owned construction company PT Adhi Karya, expects to raise Rp2.5 trillion (US$182 million) from its initial public offering (IPO) and another Rp 1 trillion from a bond offering later this year to finance its new property projects.
Adhi Commuter Properti’s risk management and finance director Muhammad Yusuf said in Jakarta on Tuesday that the company would first issue the bonds, sometime in April or May, before launching the IPO at the end of the second quarter.
“We’re offering 30 percent of our company’s total shares. We will use 80 percent of the Rp 2.5 million of IPO proceeds for capital expenditure and 20 percent for refinancing,” Yusuf said.
The additional capital from the IPO will be used to build six additional projects on top of the 12 projects that are currently being developed in Greater Jakarta, which cover about 600 hectares. The remaining Rp 500 billion will be used to pay off debt.
Yusuf said the company was finalizing the IPO process and had already appointed three securities companies to underwrite the IPO. He said the underwriters consisted of one private and two state-owned securities companies, but he declined to reveal the details.
Most of the company’s projects are high-rise apartment complexes that are being built next to Light Rail Transit (LRT) stations, also known as transit-oriented developments (TODs). The company’s ongoing projects include LRT City East Bekasi, LRT City Sentul, LRT City Grand Central Bogor and LRT City MT Hartyono.
“We control almost all of the LRT stations through our TOD properties,” Yusuf said.
Adhi Commuter expects to book marketing sales of about Rp 2.2 trillion this year, an 80 percent increase from the amount received last year. The company also expects to book profits of Rp 180 billion from total revenues projected to reach Rp 1.5 trillion during the year.
While the economic slowdown potentially affects the property sector, the company’s TOD division head Rozi Sparta said it would not affect future sales as most of the projects would be marketed to middle-income consumers.
“We’re confident […] our property projects have an advantage because they are within walking distance of the LRT stations. This will boost our sales. We’re optimistic, and it’s proven by our sales,” Rozi said.
According to Yusuf, the company was initially scheduled to hold the IPO in 2019, but decided to delay it due to the volatile market conditions. “Actually, the IPO was planned last year. But the market was unstable,” he said. (mpr)
