Bukaka, Indoprima to offer shares for local market

Bukaka, Indoprima to offer shares for local market

JAKARTA (JP): Two manufacturing firms will soon offer shares
to the public through the domestic stock exchanges to raise funds
for their expansion programs.

PT Bukaka Teknik Utama, a company operating in the engineering
and manufacturing of infrastructure-related products, will sell
around 40 million shares on the Jakarta and Surabaya Stock
Exchanges early next month, the company's president, Fadel
Muhammad, said here on Saturday.

Fadel said his company's plan to go public has received
approval from the Capital Market Supervisory Agency (Bapepam).

"Bapepam said we have fulfilled all the requirements to go
public," he said at a press conference, adding that PT Lippo
Securities will act as underwriter for its share issuance.

He said Bukaka will conduct its presentation in Jakarta on
Dec. 1 and in Surabaya on Dec. 2. He declined to disclose,
however, the exact date for the initial public offering of its
shares, saying that Bapepam had not yet agreed on some matters.

Bukaka, set up in 1978 with 12 employees to produce fire
trucks, has grown into a multi-million dollar company with more
than 1,500 employees and a wide range of products and services in
transportation, energy and telecommunications.

The company's products include vacuum tank trucks, mobile
rescue trucks, special trailers, asphalt mixing plants, rice
milling plants, oil pumping units, storage tanks, belt conveyors,
ship loaders and unloaders, steel towers, transmission lines,
electrical power plants, runway sweepers, aircraft re-fuelers and
telescopic passenger boarding bridges.

Fadel said the company's products have been marketed not only
on the domestic market but also to neighboring countries, such as
Singapore, Malaysia, Thailand, the Philippines and Japan.

"Soon we will join in a tender for the construction of two
million telephone lines in Saudi Arabia with a total investment
of US$1.8 billion. But, we will bid for only some portions, worth
about $400 million," Fadel said, adding that Bukaka is supported
by 11 other companies to conduct the project if awarded.

Fadel noted that the proceeds from the initial public offering
will be mainly used for expansion projects, especially developing
engineering of power projects and telecommunications.

"We need from Rp 100 billion ($46 million) to Rp 150 billion
for the expansion projects," Fadel noted.

He said Bukaka's current assets stand at Rp 250 billion, while
its sales are projected to reach $100 million this year, or 11
percent higher than last year's figure.

"We still have a lot of room to develop and expand our
businesses, provided we have enough supporting funds, including
those expected from the planned initial public offering," Fadel
said.

He explained that the 40 million shares to be offered will
account for 30 percent of Bukaka's total common stocks. In
addition to the Bukaka Group, the shares of Bukaka Teknik Utama
are now also owned by three state-owned companies (20 percent)
and Transpac of Singapore (10 percent). The three state companies
are PT Danareksa, PT Jasa Raharja and PT Taspen.

Fadel said to attract foreign investors he will lead team to
Singapore, Hong Kong, Japan and Britain later this month.

Indoprima

Meanwhile, PT Indoprima Gemilang, a private company producing
spare parts of motor vehicles, said that it will soon sell some
24 million shares, or 33 percent of its total shares, to the
public with PT Peregrine Sewu Securities as its underwriter.

Indoprima said it expects to reap Rp 65 billion from its
initial public offering, of which 62 percent will be used to
expand its businesses, 13 percent to support its working capital
and another 25 percent to pay its debts.

The company said the shares will be sold with a price earning
ratio of 10 to 12 times its after-tax profit this year, or seven
to eight times next year's projected after-tax profit.

Set up in 1978, Indorama has expanded its businesses in the
production of spare parts by establishing seven affiliate
companies, some of them are joint ventures with Japanese
partners.

The company produces brake lining, wire harnesses, cylinder
head gaskets, brake shoes, disc pads, clutch facings, flashers,
relays and pure lead ingots.

Deswandy Agusman of PT Peregrine Sewu Securities noted that
the prospects of the spare parts business are good, given the
government has deregulated some aspects of the automotive
industry. (rid)