Putra Sumber expecting $80m from IPO

JAKARTA (JP): PT Putra Sumber Utama Timber, an integrated manufacturer of processed wood, said yesterday that it will sell 40 million shares of its enlarged capital through an initial public offering (IPO) in order to raise about US$80 million.

A director of the company, David Se, told journalists yesterday that the company will allocate 50 percent of the share offering proceeds for financing the development of its timber estates, 20 percent for investing in secondary processing, 10 percent for expanding of its laminated veneer lumber (LVL) production and the remaining 20 percent for strengthening its working capital.

Putra Sumber's products comprise LVL, plywood, sawn timber and particle boards.

David said that the monthly production capacity of LVL currently stands at 6,000 cubic meters and will reach 10,000 cubic meters after the second phase of expansion.

Putra Sumber currently has two subsidiaries -- PT Sumber Hutani Lestari and PT Pendamaran Indah -- which operate timber estates covering 80,000 hectares in Jambi, he said.

Deswandy, a director of PT Peregrine Sewu, the lead underwriter of the planned public offering, said that Putra Sumber's shares will be offered at a level with a price earning ratio of eight to 10 times the company's projected net profit in 1996.

Deswandy said Putra Sumber has projected to book a net profit of Rp 49 billion (US$20 million) this year against last year's Rp 17 billion. In the first five months of this year, its profit exceeded Rp 17.6 billion.

David said that Putra Sumber's net revenue steadily increased from Rp 102 billion in 1994 to Rp 186 billion last year. In the period of January to June of this year, its revenue topped Rp 87.4 billion.

Putra Sumber is 85 percent owned by PT Haskojaya Abadi and 15 percent by PT Okuratama Sejati.

David also confirmed that Putra Sumber has issued convertible bonds worth Rp 58 billion. The bonds can be converted to 20.5 million shares at a conversion price of Rp 2,845.

The bondholders will therefore own a 12 percent stake in Putra Sumber, while the investing public will hold 25 percent. (alo)