PT Sierad Produce to go public

JAKARTA (JP): PT Sierad Produce, a publicly-listed PT Anwar Sierad subsidiary, plans to sell 250 million new shares to the public early next month to raise approximately Rp 300 billion (US$129.3 million) for its expansion program.

The company's president Budiardjo Tek said yesterday the new shares, each with a nominal value of Rp 500, would account for 38.5 percent of its total shares.

"Our total shares will become 650 million. But this does not include our convertible bonds which are likely to add 70 million new shares," he said at an expose on the company, which specializes in chicken fast-food franchises, food production and integrated poultry industries.

He said the company's convertible bonds worth $19.25 million, issued last July, could be converted into new shares a month after the initial public offering.

But he said his company had a call option on the convertible bonds allowing it to buy them back when it wants.

Budiardjo said the new shares would be offered to the public for between Rp 800 and Rp 1,100 a share, with a price-earning ratio of eight to 11.

"We'll decide the price after our international roadshows. We expect to raise fresh funds of between Rp 200 and Rp 300 billion from the share offering," he said, adding that the roadshows would take place between Nov. 12 and Nov. 22.

He said about 48 percent of the proceeds from the public offering, underwritten by Lippo Securities, would be used to finance its expansion program, and that 25 percent would repay its loans and 27 percent would strengthen its working capital.

Lippo Securities' managing director, Kelvin Lee, said the new shares of PT Sierad Produce -- the first subsidiary of the poultry supplier PT Anwar Sierad to go public -- would be listed on the Jakarta and Surabaya stock exchanges on Jan.10.

Sierad Produce's net profit was Rp 17.6 billion last year with total sales reaching Rp 274 billion. This year's net profit is projected to increase 74 percent to Rp 30 billion, while total sales are expected to rise to Rp 399 billion.

In the first five months of this year, the company's net profit and net sales reached about Rp 10 billion and Rp 180 billion, respectively.

Next year, the company expects to raise its net profit by 156 percent to Rp 76.7 billion, with total sales of Rp 778 billion. (bnt)