Siloam makes capital market debut

JAKARTA (JP): PT Siloam Gleneagles Health Care (SGHC), a hospital firm affiliated to Lippo Group, is offering 47 million new shares at Rp 2,950 (US$1.23) each for three days until Wednesday to raise Rp 138.7 billion, said an executive.

Kelvin Lee, corporate finance director of PT Lippo Securities, the underwriter of the share offering, said over the weekend that SGHC would float the new shares, which would account for 32.02 percent of its enlarged capital, on the Surabaya Stock Exchange on March 26.

He said SGHC aimed to gain an operational profit of Rp 27.1 billion with an after-tax profit of Rp 9.2 billion in 1996/1997.

Its net profit was projected to increase to Rp 24.7 billion in 1997/1998, to Rp 38.2 billion in 1998/1999 and to Rp 108 billion in 1999/2000, he said.

According to SGHC, 28.7 percent of the proceeds from the share sales would be used to buy a stake in PT Nusa Medika Utama, which would build a 250-bed hospital in the Lippo Cikarang industrial and housing estate in Bekasi, east of Jakarta, and 20.3 percent to increase its ownership in PT Budi Mulia Gleneagels, which operates a hospital in Surabaya, East Java.

SGHC said another 13.6 percent of the proceeds would be used to buy a stake in PT Sentralindo Wirasta, which would build a 200-bed hospital in East Jakarta, 13.6 percent to enlarge its take in PT Eramulia Pratamajaya, which would build a 200-bed hospital in South Jakarta, and another 13.6 percent to develop three health centers in Jakarta.

The remaining 10.2 percent would be used to increase SGHC's stake in PT Aritasindo Permaisemesta, which would establish a 200-bed hospital in Bandung, West Java.

According to Jos Parengkuan, an executive of Lippo Securities, the hospital sector in Indonesia has room to expand rapidly in the coming years because, based on statistics released by the World Bank, national health costs are quite low, being $12 per capita in 1995, as compared to $70 in Malaysia and Thailand.

The ratio of physicians to the population is also very low -- 1:6,786 -- while the ratio of hospital beds to population is 1:1,703.

SGHC, which started operating in June 1996, is now 35 percent owned by PT Sentra Kharisma Indah, 30 percent by PT Sentra Goldhill Businesspark, 30 percent by Gleneagles Development Pte. Ltd and 5 percent by Global Private Equity. (10)