'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)