Arpeni shares on crest of a wave after IPO

The Jakarta Post Jakarta

Shares of shipping firm PT Arpeni Pratama Ocean Line cruised into positive territory, gaining 12 percent on Wednesday during its first day of trading on the Jakarta Stock Exchange.

Arpeni's shares, with an initial public offering price of Rp 625, closed at Rp 700 on Tuesday after reaching an intraday high of Rp 710. The company, which is listed under the symbol APOL, managed to generate Rp 312.5 billion (US$32.4 million) by selling 500 million shares, equivalent to 33.35 percent of the company, through the IPO.

President director and founder Oentoro Surya said that 90 percent of the money would be used to finance the acquisition of 14 additional ships at a total cost of US$125 million, while the remaining 10 percent would be added to the company's capital.

He said the remaining funds needed to finance the acquisition of the ships would come from loans from domestic and overseas banks.

"We'll make up the rest of the money with bank loans as we now have more leeway to borrow," he said, adding that the IPO has reduced Arpeni's net gearing ratio, a measure of net debt to shareholders' equity, from 1.2 to 0.9.

He said the addition of 31 ships to Arpeni's fleet would increase the company's capacity from 580,000 deadweight tons (dwt) to 880,000 dwt and help it reach its goal of doubling its net income this year.

Last year, the company booked net income of Rp 77.3 billion, compared to Rp 22 billion in 2003, on net revenue of Rp 845.9 billion, which was higher than the Rp 559.8 billion recorded in 2003.

Oentoro said Arpeni and the domestic shipping industry in general were poised for further growth, spurred by the recent introduction of new cabotage rules.

The rules, which are contained in a presidential instruction issued in March, forbid foreign vessels from transporting cargoes on domestic shipping routes. The Ministry of Transportation estimates that 53 percent of domestic cargoes are carried by foreign vessels.

Arpeni's IPO, which was underwritten by PT DBS Vickers Securities Indonesia and Mandiri Sekuritas, was oversubscribed by 4.27 times. Foreign investors took 57.01 percent of the shares and domestic investors the remaining 42.99 percent.

After the IPO, retail investors hold 33.35 percent of Arpeni's shares, with PT Bagusnusa Samudra Gemilang and PT Mandiri Sanni Pratama owning 35.98 percent and 30.67 percent respectively.

Arpeni, which was founded in 1975, is the second company to be listed on the Jakarta Stock Exchange this year. The exchange has set a target of listing 30 companies this year. Last year, 12 companies raised Rp 2.14 trillion in funds by listing on the bourse. (002)