Lippo Life to split stocks to improve liquidity

JAKARTA (JP): Lippo Life Insurance, a publicly listed life insurance company of the Lippo Group, will split its shares to improve their liquidity.

The company announced here over the weekend that the stock split -- to be effective on April 19 -- will cut the nominal price of shares to Rp 500 (22 U.S. cents) each from Rp 1,000 at present.

The company also plans to distribute a bonus share for every one existing share. As a result, Lippo Life shareholders owning one share will end up owning four shares.

By the stock split, the company's shares on the market will increase by 400 percent from 48 million to 192 million shares.

In addition to the split, the company also announced a program to promote a new share ownership plan with the aim to promote wider Lippo Life shares ownership.

The program, it added, would be promoted among the 1.8 million customers of the Lippo Life Insurance and Lippobank.

Lippo Life Insurance, which is listed on the Jakarta Stock Exchange, has a market capitalization of over Rp 500 billion.

Through 121 sales offices throughout the country, Lippo Life claims to control 18 percent of the local insurance market, boasting an annual revenue of over Rp 450 billion.

"We're extremely pleased with the performance of Lippo Life," said Lippo Life's president, Billy Sindoro, adding that this year his company was aiming for a net profit of Rp 29.4 billion.

He noted that his company's revenue growth has averaged more than 50 percent per annum over the last 10 years. In the last two years alone, growth averaged 300 percent per annum.

"We anticipate strong growth over the next decade in line with Indonesia's healthy economic growth and growing middle income group," he said.

Lippo Life quoted Director of Insurance at the Ministry of Finance Sophar L. Toruan as noting recently that the Indonesian life insurance industry has grown rapidly and will play a big role in Indonesia's economic development.(13)