Lippo Karawaci going public after delay

Lippo Karawaci going public after delay

JAKARTA (JP): PT Lippo Karawaci, a township developer in Tangerang, West Java, is finally to sell 30.8 million new shares or around 8 percent of its enlarged stocks to the public early next month after a year of delay.

Lippo Karawaci's president, Eddy Sindoro, said yesterday the company expected to raise around Rp 170 billion (US$76.5 million) in fresh funds from the public offering.

Eddy was optimistic that the public offering would receive a positive response from both local and foreign investors, despite the delay.

"The plan to go public was delayed only due to unfavorable market conditions. We hope this time things are more promising," he told securities analysts at a presentation of the company's initial offering.

The Lippo Group has been reported to be suffering financial difficulties with Lippo Land, the group's property arm which owns Lippo Karawaci, and Lippo Cikarang, a township development in Cikarang, West Java.

The financial problems were allegedly the result of poor marketing of the two townships. But this allegation was flatly denied by the business group.

Yesterday, the organizer of the presentation meeting allowed only a couple of journalists to attend the meeting, saying that the auditorium was already full. The organizer promised to arrange a press conference for the journalists in the afternoon but it was later cancelled for no clear reason.

Eddy said that a number of high-rise buildings, luxury housings, hotels, a modern shopping complex, a golf course, a world-class hospital and an educational center meeting international standards had been built in the 500-hectare integrated township in Karawaci.

"Big domestic and foreign retailers such as SuperMall, Wal- Mart, and JC Penney have stores in the township's business center," he added.

Eddy said that sales were very encouraging, with over 3,000 luxury houses having been sold since the launching of the project in April 1993.

"Bank Lippo and a number of companies under the Lippo Group have relocated their headquarters to Karawaci," he said, adding that the country's giant retailer Matahari and a number of other local business groups, including Dynaplast and Anwar Sierad, were also constructing offices there, around 30 minutes from the Tomang overpass in West Jakarta.

Eddy said that Lippo Karawaci, which will be the seventh member of the Lippo Group to be listed on the Jakarta and Surabaya stock exchanges, booked sales revenues of Rp 227.9 billion ($126.31 million) for the financial year ending in June 1995. The sales revenues were Rp 137.5 billion the year before.

After-tax profits rose to Rp 70.6 billion in 1994/95 from Rp 22.2 billion in the same period, he said, adding that sales turnover and net profits for the current financial year were projected to reach Rp 470.9 billion and Rp 100.5 billion respectively.

He said that 40 percent of the proceeds raised from the sales of the shares to the public would be used to construct infrastructure and public utilities, 20 percent would go on land clearance and the remaining 20 percent would help to strengthen the company's capital. (hen)