Grenfell pulls out of Makindo

Grenfell pulls out of Makindo

JAKARTA (JP): Makindo's president Gunawan Yusuf confirmed
Saturday that Deutsche Morgan Grenfell Indonesia had pulled out
from being the main underwriter of his company's initial public
offering.

Gunawan, however, denied a press report that Grenfell's
withdrawal was made due to predictions that his company could
face a gloomy capital market debut.

Grenfell's withdrawal was aimed at avoiding a conflict of
interest because Morgan Grenfell was likely to form a strategic
alliance with Makindo in the next few months, he said.

But he refused to explain details of the alliance plan,
stating that they were still working on the plan.

"(If Morgan Grenfell has a stake in Makindo), the company
would certainly have a conflict of interest from being a lead
managing underwriter," Gunawan said. "So the company's withdrawal
has nothing to do with the prospects of the initial public
offering," he added.

Gunawan said BNP PrimeEast and Bahana Securities would replace
Morgan Grenfell as the lead managing underwriters for Makindo's
initial public offering (IPO).

He said Makindo expected to raise around Rp 367.57 billion in
fresh funds from the public through the offering of 377 million
shares this month.

Makindo shares, each with a par value of Rp 500, would be
priced at Rp 975 each.

Around 67 percent of the proceeds from the IPO would be used
to increase the company's working capital, 29 percent to finance
the institutional investors and 4 percent to improve the
company's information technology, he said.

He said that the company would list its shares both in the
Jakarta and Surabaya Stock Exchanges on January 9.

Makindo, set up in 1973, has total assets of Rp 148.13 billion
as of December 1996. It recorded a net profit of Rp 32 billion in
this year's first semester compared to Rp 9 billion in the
corresponding period last year.

Makindo will be the third securities firm listed in the
Jakarta and Surabaya Stock Exchanges after Lippo Securities and
Bhakti Investama.

Some analysts have predicted that Makindo's IPO plan amidst
the current sluggish market conditions would result in failure.

The analysts said that share prices for Astra Agro Lestari,
which recently listed in JSX and SSX, for example, continued to
decline from its initial price.

"If that is an indication of market trends, Makindo's stock
price will decline too," one analyst said. (aly)