Plywood company Mahakam to go public next month

JAKARTA (JP): PT Tirta Mahakam Plywood Industry (TMP) will launch an initial public offer (IPO) next month to raise about Rp 50 billion (US$7.3 million) to finance an expansion program.

Lim Christine Hariyanto, an executive of PT Harita Kencana Securities -- one of the underwriters of the IPO -- said on Tuesday that TMP planned to sell 50 million shares, or 32 percent of its total enlarged shares during the offering period from Nov. 22 to Nov. 25.

She said the shares, with a par value of Rp 500, would be sold at about Rp 875 a piece or at between five and six times the earnings per share for this year.

The company has appointed Christine's company along with PT Trimegah Securindolestari as its lead underwriters.

The IPO will reduce the founders' stock holding to 78 percent.

About 40 percent of the IPO proceeds will be used to increase TMP's production capacity, another 40 percent will be allotted to strengthen TMP's working capital, while the remaining will be used to pay bank debts, she explained.

TMP vice president director Lim Gunawan Hariyanto said the company, which sells most of its products to Japan, would expand its overseas market to the U.S. next month.

TMP, which operates plywood plants in Samarinda, East Kalimantan, will be the fifth timber-based company to be listed on the Jakarta Stock Exchange (JSX) following listings by Barito Pacific Timber, Saya Sakti Unggul Corp., Sumalindo Lestari Jaya and Surya Dumai Industri.

Last year TMP's net profits dropped to Rp 730 million from Rp 2.92 billion in 1997 due to losses in foreign exchange and high lending rates.

Gunawan said he was optimistic that this year's net profit would increase to Rp 5.8 billion due to increased sales during the second semester.

However, in its press statement, the company managed only to book Rp 878 million in net profits in the January-May period.

The company itself was established in 1981 and has been a player in the plywood industry for the last 16 years. (03)