PT Astra Agro Lestari to offer 125.8m shares

JAKARTA (JP): The currency turmoil over the past three months has not affected plantation company PT Astra Agro Lestari's plan to offer its shares to the public early next month.

PT Astra Agro Lestari, a subsidiary of the country's largest automaker PT Astra International, plans to offer 125.8 million shares.

The company's president Benny Subianto said yesterday the shares would account for 10 percent of the company's total enlarged capital.

Agnes Safford, president of ABN AMRO Hoare Govett Indonesia, the lead managing underwriter for the company's initial public offering, said the shares, each with a par value of Rp 500, would be sold at a price earnings ratio of between 10 and 13 times the 1998 earnings per share projection.

She did not mention the exact share price for the initial public offering (IPO), but said it would be set similar to shares of other plantation companies like PT London Sumatra.

"Astra Agro Lestari's prospects are quite favorable because the price of crude palm oil (CPO) in the global market has continued to increase over the past few months," she said.

According to ABN AMRO-Hoare Govett's projection, the price of CPO in the global market would continue to increase to US$560 per ton in 1998, up from the current $542.50 per ton.

"The CPO price in the global market makes us optimistic about Astra Agro Lestari," she said.

The company's offering period would be from Dec. 3 to Dec. 5 and it would be listed on the Jakarta and Surabaya stock exchanges Dec. 15.

Revenue

Subianto said Astra Agro did not have any problems with the currency crisis as the company's revenue was in U.S. dollars while costs were in rupiah.

"The currency crisis is like a windfall of profit for our company," he said.

An executive said the company expected to raise about Rp 200 billion ($56.33 million) from its IPO.

Benny said about 72.5 percent of IPO proceeds would be used to expand the company's plantation areas, 10 percent for infrastructure development, 10 percent to refinance short-term debt and the remaining 7.5 percent to increase the company's working capital.

He said the company had a total debt of Rp 600 billion as of October, including $15 million in short-term liabilities.

Astra Agro, set up in 1988, recorded Rp 36.1 billion in profit and Rp 218.9 billion in sales in the first half of this year.

The company operates 12 palm oil mills with a total processing capacity of 447 tons of fresh fruit bunches (FFB) per hour and plans to increase the number of mills to 27 by 2002 with a FFB capacity of 1,107 tons per hour.

The company has 164,000 hectares of oil palm plantations in Sulawesi, Kalimantan and Sumatra.

"Oil palms account for 92 percent of our plantations with the remainder in rubber, tea and cocoa," Benny said. (aly)