Bakrie Plantation plans rights issue

Bakrie Plantation plans rights issue

The Jakarta Post, Jakarta

Shares in PT Bakrie Sumatra Plantations jumped by 24 percent
on Thursday, after the publicly listed company announced its plan
to sell new shares via a rights-issue scheme, in a bid to raise
cash to finance an expansion program.

Bakrie Plantations shares ended higher by Rp 275, to Rp 1,400
on the Jakarta Stock Exchange (JSX).

Company president director Ambono Janurianto told The Jakarta
Post that it aimed to raise between Rp 200 billion (US$22
million) and Rp 300 billion through the rights issue.

"Proceeds from the rights issue will be used mostly to finance
our expansion. We expect to launch the rights issue this year
after conducting a stock split around October," said Ambono.

The company plans to split the value of its shares in order to
smooth the process of selling the new shares on the market, as
the value of the shares would become more affordable for most
investors.

After the stock split, the company's shares are expected to be
valued at Rp 200 per share.

In its report to the JSX, the company said proceeds gained
from the rights issue would be used to acquire a new palm oil
factory and rubber plantations, set up new palm oil mills,
refinance debts and finance working capital.

Ambono said the acquisition was projected to boost the
company's sales this year by at least 40 percent, both on higher
production and commodity prices.

The acquisition of new plantations and mills will be focused
in Sumatra.

Last year, Bakrie Plantation recorded sales of Rp 457 billion,
up from Rp 357 billion in 2002. Its net profit was Rp 80 billion
last year, against Rp 75.9 billion in 2002.

About 60 percent of the company's revenue is currently derived
from its palm oil business, with the remaining 40 percent from
its rubber business.

According to Ambono, the rubber business is expected to
contribute to around 50 percent of the company's total sales next
year, following a projection of higher rubber prices next year
compared to those of palm oil.

"We will primarily depend on rubber sales next year, since
demand for rubber will be higher than for palm oil," said Ambono.