Perawang Lumber to float shares

JAKARTA (JP): Plywood producer PT Perawang Lumber Industri plans to sell about 180 million new shares or about 20 percent of its enlarged stocks next month to repay debts of Rp 64 billion.

The company said on Thursday it expected to raise about Rp 90 billion (US$10.58 million) from the initial public offering (IPO).

"Rp 46 billion of the total IPO proceeds will be used to repay debts to the plywood producer's sister company PT Perawang Perkasa Industri," the company said, adding that the remaining 18 billion will repay debts to state Bank Mandiri.

The remaining IPO proceeds will be used to finance a new lumber plant and to increase its stake in its affiliate, PT Wiras Perdana Lines, the company said.

Listed PT Trimegah Securities has been appointed as the underwriter for the IPO. The new shares, with a par value of Rp 500, will be sold at between Rp 500 and Rp 650 during the offering period between July 10 and July 12.

Akhabani, head of investment banking at Trimegah Securities, said the Perawang Lumber shares would be listed on the Jakarta Stock Exchange after the public offering was completed.

He said he was optimistic the market would respond well to the IPO given the company's bright prospects.

But Lukman Hakim of Ludlow Securities said Perawang Lumber's shares were not so attractive because the largest portion of the IPO's proceeds would be used to repay debts, not to fund business expansion.

The company's IPO will reduce the ownership of the company to 80 percent, from 99.5 percent.

The company also said it would give seven warrants for every 10 shares as a sweetener to attract investors, which would be convertible to common shares within eight months of the IPO.

Perawang Lumber produces 156,000 cubic meters of plywood, 48,000 cubic meters of coated plywood and 51,000 cubic meters of particle board per year.

It booked a net income of Rp 20.5 billion on net revenues of Rp 348.2 billion in 1999, compared to Rp 6.7 billion and Rp 310.9 billion the previous year.

Currently, 91 percent of the company's output is for the export market, such as Japan, South Korea, Hong Kong, Taiwan, European and Middle Eastern countries.

Perawang Lumber is 99.5 percent owned by listed forestry concern PT Surya Dumai. The parent company posted a negative income of Rp 53.2 billion in 1999 and posted total debts of Rp 1.5 trillion as of the end of 1999.(udi)