'Tempo' to float its shares on JSX in December

'Tempo' to float its shares on JSX in December

JAKARTA (JP): Publisher of the weekly Tempo magazine, PT Tempo
Inti Media, will become Indonesia's first publicly listed print
media company when it floats its shares on the Jakarta Stock
Exchange (JSX) next month.

Tempo said on Wednesday that it planned to issue up to 200
million shares in an initial public offering (IPO) later this
month and up to 120 million warrants.

The company will offer its shares at a price of between Rp 275
(about 3 U.S. cents) and Rp 400 per share, during the offering
period between Nov. 29 to Dec. 1.

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.

Acting as the lead underwriters of the IPO are PT Trimegah
Securities and PT Victoria Kapitalindo International.

"We want to make history by becoming the first print media
company to go public," one of Tempo's founders and chief
commissioner, Goenawan Mohamad, said in a public announcement on
Tempo's IPO plans.

He said that listing on the JSX, would be part of the
company's strategy to face the increasingly tight competition in
the media sector.

According to him, capital strength will bring economic
independence allowing the company to better safeguard its
integrity.

"Tempo wants to emphasize that it's part of the people," he
said of the IPO plans.

After the IPO and the issuance of the warrants, the public
will own 21.8 percent of Tempo, PT Grafiti Pers and the Tempo
Employee Foundation and warrants each 13 percent, The Jaya Raya
Foundation and the 21 Juni 1994 Foundation each 19.6 percent.

Through the foundations, Tempo's employees currently own 50
percent of the company.

Goenawan said that becoming a publicly listed company placed
further demands on the magazine for greater integrity.

Tempo was founded in 1971 and has been banned twice by the
government when the magazine was deemed as too critical.

The latest ban was in 1994 forcing the magazine to report via
the Internet through Tempo online. It resumed publication in
1998.

Tempo president Leonardi Kusen said that since its relaunching
in 1998, the magazine has regained its leading position in the
magazine readers market.

He said in 1998 the magazine reaped 46 percent of the market
share, and was now holding a 55 percent share.

Tempo also dominated the magazine advertising market share by
58 percent in the first semester of this year, Leonardi said.

But Trimegah estimated the company to suffer losses of Rp 4.8
billion this year, which, according to Leonardi, is due to
compensation claims of Rp 4 billion in a dispute over the
ownership of Temprint.

In 1999, Tempo booked a net profit of Rp 1.8 billion from a
net loss of Rp 4.5 billion in 1998, which Leonardi attributed to
separation payments after mass layoffs at Temprint.

He regard the losses as extraordinary items which would not
likely occur again.

In the future, he said, the company envisioned itself as a
multimedia company with businesses spanning the Internet, daily
newspaper, and television and radio broadcasting services.

Leonardi said that next year it would launch Tempo's daily
newspaper despite the already crowded market.

According to him, Tempo will rely on its strong brand image to
penetrate the tight market.

The expansion plans, he said, was necessary to tap the larger
advertising potential of other media types.

While the country's total magazine advertising spending was
only 3.8 percent this year, T.V and newspaper reaped a hefty 60.6
percent and 26.0 percent respectively, he explained.

Stock market analyst Baradita Katoppo said that Tempo's shares
would offer investors stable prices with high profit margins.

"This is not a growth story, neither are the shares of the
cyclical type. But investors can expect high dividend payments,"
Baradita told reporters.

According to him, Tempo would have no difficulty booking
profits despite its ambitious expansion plans.

However, he warned that entering the newspaper market was
tough because of the tight competition and Tempo's lack of
experience in this segment. (bkm)