Indomobil now public firm by backdoor listing

JAKARTA (JP): The giant Salim Group's automotive arm Indomobil was transformed into a publicly listed company through a backdoor listing yesterday.

The group initiated the listing by merging PT Indomobil Investment Corporation with its publicly listed PT Indomulti Inti Industri.

The merger pooled equity of the two firms with Indomulti being the surviving company. Shareholders of both companies approved the merger yesterday.

Indomulti was then renamed PT Indomobil Sukses Internasional, which then sold all assets of the now-defunct Indomulti, worth Rp 63 billion (US$19 million), to the majority shareholder, the Salim Group.

Indomulti had several subsidiaries that produced a wide range of goods, including textiles, shoes, packaging and printing products, iron sheets and mosquito coils.

A Salim Group executive director, Benny S. Santoso, said Indomobil's move was to improve Indomulti's value and capitalization.

"Initially, we wanted to improve Indomulti's performance in the stock market. At the same time, we were preparing the listing of Indomobil. We then decided to merge the two firms to achieve both objectives at the same time," Benny said.

He said the merger was based on Indomobil's book value. Indomobil's book value was about Rp 500 billion, while its market value was about Rp 2 trillion.

"This proves Salim's commitment to public shareholders," he added.

Nikko Securities Indonesia director Harianto Solichin said Indomulti's stock rose to 3,750 Wednesday from below 3,000 before the announcement of the merger early September.

Nevertheless, the merger resulted in decreased ownership by the public in listed Indomobil to 5.13 percent from 20.51 percent.

Benny said the Salim Group would divest some of its ownership in Indomobil to the public through a secondary offering of shares early next year so the public could own at least 20 percent of the company.

"So the public will also benefit from the expansion of Indomobil," Benny said.

Indomobil posted a net profit of Rp 102 billion last year, up from Rp 32 billion in 1995. In the first half of this year, the company booked Rp 115 billion in net profit.

Indomobil president Soebronto Laras claimed yesterday that Indomobil was the country's second largest automaker after publicly listed PT Astra International, with a 21 percent share of the market.

Last year, it sold 66,553 vehicles, a drop from 80,020 in 1995. It projected it would sell up to 81,380 vehicles this year.

"Well, the drop in sales in 1996 was because of the national car issue," Soebronto said.

To withstand next year's possible economic downturn, Soebronto said his company would launch a new Suzuki van, called Suzuki Karimun.

Soebronto said Indomobil was cooperating with Nissan Motors Co Ltd of Japan to produce an Asian car to compete with Honda City and Toyota Saluna sedans.

"This Nissan Asian car would be produced here, including its engine. With this car, we will target not only the Indonesian market, but also the region," Soebronto said.

He noted that it would cost about US$150 million to construct engine manufacturing facilities.

The car would make its public appearance by 2000.

Besides automobiles, Indomobil also produces Suzuki motorcycles.

Last year, it sold 300,246 Suzuki motorcycles, up from 200,464 in 1995. This year, the company projected it would sell 442,455 motorcycles. (rid)