Dharmala Insurance to issue bonus shares

Dharmala Insurance to issue bonus shares

JAKARTA (JP): The shareholders of publicly-listed insurance company PT Dharmala Insurance have approved a plan to issue of four bonus shares for five old shares, company president Suhanda Wiraatmadja said yesterday.

Speaking after the company's extraordinary shareholders meeting, Suhanda said that the bonus shares will be distributed on Feb. 22, 1996. They will be derived from the capitalization of the capital gains obtained through the company's initial public offering in 1989, which amounted to Rp 7.86 billion (US$3.4 million), he said.

Suhanda said the bonus share issue will increase the company's paid-up capital from Rp 9.82 billion to Rp 17.68 billion.

He acknowledged that the current paid-up capital is too small to allow the company to grow because its underwriting capacity is severely limited.

Suhanda said the issue is expected to boost the liquidity of the company's shares on the stock market, which are now traded at Rp 2,000 each, because the share price will drop to Rp 1,111 after the bonus share issue.

Dharmala Insurance, which is 67-percent owned by PT Dharmala Sakti Sejahtera, a unit of the Dharmala Group, had total assets of Rp 34.89 billion as of December 1994. Its net profit dropped from Rp 267 million in 1993 to Rp 148 million last year.

Suhanda said the company's net profit is projected to reach Rp 2 billion this year, due mainly to a sharp increase in its underwriting income, which is expected to reach Rp 5.4 billion this year. Earnings per share are also set to rise from Rp 15 to Rp 114, he said.

He added that yesterday's meeting also appointed Tanadi Iwan Saputra Tanjung as the company's director of marketing, a new post on the board of directors. (08)