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)