London Sumatra to offer 38.8m shares

London Sumatra to offer 38.8m shares

JAKARTA (JP): PT PP London Sumatra Indonesia (Lonsum) will sell 38.8 million new shares to the public next month to raise funds for its expansion projects.

Lonsum's president, Geoffrey Brown, said yesterday that the shares to be offered will represent 19.2 percent of its total shares.

Brown declined to quantify the total proceeds expected from the share offering but he said that the company will allocate US$26 million of the funds for debt repayment, $24 million for an expansion project in South Sumatra, and the rest to strengthen its working capital.

"The shares will be priced at 11 to 13 times the estimated 1996 earning per share," Lonsum's finance director, David Adams, said.

Lonsum, which operates 19 plantations totaling 55,000 hectares in North Sumatra, Java and Sulawesi, has formally applied to list its shares on the Jakarta and Surabaya stock exchanges.

The expansion projects to be financed by proceeds from the public offering are expected to double the amount of land for cultivation and the output of crude palm oil, he said in a statement.

The company's activities include the cultivation, harvesting and processing of oil palm, rubber and, to a lesser extent, cocoa, tea and coffee.

Brown said that in 1995, sales revenues amounted to Rp 188.6 billion (US$81.7 million), with net profits of Rp 61.4 billion ($26.6 million).

He said that the company has in recent years averaged more than five tons of crude palm oil per hectare, which is at least 10 percent higher than yields gained by other large Southeast Asian plantations companies.

London Sumatra's operations were established in 1906 in North Sumatra. It was part of Harrisons and Crosfield, a pioneer in the plantation industry on Indonesia, and was purchased by the Napan Group in 1994.

At present, 75 percent of London Sumatra's shares are held by PT Pan London Sumatra Plantation (PPLS) and 25 percent by Happy Cheer Limited (HCL). Both PPLS and HCL are now owned by businessmen Andry Pribadi, Ibrahim Risjad and Henry Liem.

The public offering will reduce PPLS ownership to 60.6 percent and that of HCL to 20.2 percent, with the investing public holding another 19.2 percent.(hen)