Matahari buys 5 percent of Hero

JAKARTA (JP): Retail firm PT Matahari Putra Prima announced yesterday that it had bought 5.01 percent of PT Hero Supermarket's shares.

Matahari president Hengky Tjitra said in a statement that the company could buy more of Hero's shares in the near future to increase its ownership.

But he did not mention how much Matahari spent to buy the 11.77 million Hero shares. He also did not disclose from whom the company bought the shares.

Hengky only described the purchase of Hero's shares as a long- term investment, as part of the company's efforts to strengthen its position in Indonesia's retail industry.

"There should be possibilities for good synergy with Hero that will be mutually beneficial in the future in the areas of joint purchasing power, promotion, technology and other retail ideas," he said.

Hengky did not disclose where the company got the funds used to purchase the five percent stake at Hero.

But Matahari said earlier this week that it had received Rp 470 billion (about US$138 million) from Multipolar Corporation, its largest shareholder, as the payment for the portion of its rights shares.

Matahari, the country's publicly-listed department store chain, said that the payment was made "with cash on hand with no bank loans".

Matahari is currently offering a two-to-one rights issue to raise fresh funds to finance its expansion. It expects to raise around Rp 902 billion from the rights issue.

After the rights issue, Matahari expects to book Rp 1.5 trillion in equity.

Matahari, which claims to be Indonesia's largest retail group, operates 81 retail outlets throughout the country, with more than 2,700 local suppliers. Its annual sales have reached more than Rp 2 trillion.

Matahari shares on the Jakarta Stock Exchange rose Rp 25 to Rp 600 yesterday.

Hero, founded in 1971, operates more than 60 stores throughout the country.

Hero shares gained Rp 375 to close at Rp 1,675 yesterday. (rid)