Tempo makes successful debut in stock market
JAKARTA (JP): The initial public offering (IPO) of PT Tempo Inti Media, the first Indonesian print media company to float its shares on the Jakarta Stock Exchange (JSX), has been oversubscribed by 81 percent.
Vice president of Tempo's lead underwriter PT Trimegah Securities, Notariza Taher said on Thursday that the successful debut in the capital market partly resulted from the strong brand image of the company's product.
"The brand image (of Tempo) is quite strong, and it's the first media company to go public," Notariza said at a media conference.
Tempo Inti Media, the publisher of the weekly Tempo magazine, sold about 20 percent of its shares to the public during last week's IPO.
Notariza said 50 percent of the shares offered during the IPO were purchased by institutions, 40 percent by individual investors and 10 percent by Tempo's employees.
Tempo sold 125 million shares during the IPO to raise Rp 37.5 billion in capital.
It plans to use 60 percent of the IPO proceeds as investments for the planned Tempo daily newspaper, 25 percent as debt payments of its subsidiary printing company PT Temprint and 15 percent as working capital.
Tempo initially planned to list its shares on the Jakarta Stock Exchange (JSX) by Dec. 15, but the late issuance of a permit by the Capital Market Supervisory Agency (Bapepam), forced the company to delay the listing until Jan. 8, Notariza said.
He expressed confidence that in the second week of January the market would return to its normal pace after a long holiday, to actively trade on Tempo shares.
Tempo has said that listing on the JSX would be part of the company's strategy to face the increasingly tight competition in the media sector.
With its expansion plans, Tempo hoped to tap the potentials of higher advertising revenues from other media types.
Advertisement spending this year was only 3.8 percent for magazines, as against 60.6 percent for televisions and 26 percent for the newspapers, according to Tempo.
Notariza added that Tempo would focus on developing its newspaper business next year, as expanding to the television sector was only a long term plan.
He said other print media companies had expressed interest in following Tempo and floating their shares at the JSX.
Notariza cited the daily Bisnis Indonesia and news website detik.com as among the media that were interested in joining Tempo on the stock market.
"After Tempo's public expose, we have been approached by several media companies who wanted to know the feasibility and likelihood of their media going public," he continued.
He said Tempo's performance on the JSX might become a barometer for other print media companies to join the company.
Trimegah estimated the company to suffer losses of Rp 4.8 billion this year, which according to the company was largely due to extraordinary items. Last year it booked a net profit of Rp 1.8 billion.
After the IPO and issuance of warrants, the public will own 21.8 percent of Tempo, PT Grafiti Pers and the Tempo Employee Foundation each 13 percent, the Jaya Raya Foundation and the 21 June 1994 Foundation each 19.4 percent. (bkm)