PT Cahaya Kalbar starts share offering

JAKARTA (JP): PT Cahaya Kalbar, a producer of specialty fats, yesterday started its three-day initial public offering (IPO), expecting to raise approximately Rp 34 billion (US$14.4 million).

Inarno Djajadi, the president of PT Aspac Uppindo Securities, the lead underwriter of the share offering, said that the Rp 500- nominal value shares were sold at Rp 1,100 each, representing a price-earning ratio of eight times forecast earnings for 1996.

In term of size, Cahaya Kalbar's offering is smaller than the other two IPOs wrapped up yesterday by PT Citatah and PT Lonsum, and the IPO of PT Lippo Karawaci which was completed last week.

The last three companies are thought to have raised more than Rp 100 billion.

Djajadi, said he was optimistic that the offering would be oversubscribed.

"I think it's realistic to predict that Cahaya Kalbar will get a positive response from the investing public because of the company's strong fundamentals," Djajadi argued.

"Moreover, it will be the first company in the industry to go public and to be listed on the Jakarta Stock Exchange."

He said that currently Cahaya Kalbar is the country's biggest producer of specialty fats, with a capacity of 12,500 metric tons per annum. Last year production was 8,000 metric tons.

One of the company's specialty fats is cocoa butter equivalent (CBE) which is used in the production of chocolate.

In 1995, Cahaya Kalbar booked Rp 56 billion in net sales and Rp 7.6 billion in net profits.

The company said that for the whole of this year, its net profits are likely to increase to Rp 12.5 billion, supported by stronger export sales and product diversification.

The company reported that its exports to Russia, which amounted to Rp 9 billion last year, represented 21 percent of its total exports.

The company will use up to 65 percent of the proceeds to finance its product diversification project. (alo)