Tunas Baru Lampung to go public next year

JAKARTA (JP): Crude palm oil (CPO) producer PT Tunas Baru Lampung will launch an initial public offering (IPO) in January next year to raise between Rp 173 billion (US$25 million) and Rp 322 billion to finance its expansion.

An executive of PT Dinamika Usaha Jaya, the lead underwriter of the initial public offering (IPO), said on Friday PT Tunas Baru Lampung (TBL) planned to sell between 96.15 million and 140.38 million new shares during the offering period from Jan. 12 to Jan. 14.

The IPO will lower the founding shareholders' stake in the company to 58 percent, Benny Sudrata also said.

He said the shares, with a par value of Rp 500, would be sold at between Rp 1,800 and Rp 2,300 each, or between three and four times the price earning ratio for 2000.

TBL vice president Sudarmo Tasmin said about 52.08 percent of the IPO proceeds would be used to construct two new CPO plants; 17.36 percent to increase the production capacity of the existing plants; 19.74 percent to increase ownership in one of the company's subsidiaries; 8.56 percent to increase oil palm crops; and 2.26 percent to strengthen the company's working capital.

He also said the company sold about 70 percent of its output during the first half of this year on the domestic market, while the remaining 30 percent was exported to the Netherlands, China, Malaysia, Singapore and Hong Kong.

TBL, which operates crude palm oil plants in Lampung, Palembang and Surabaya, has a total land concession of 62,015 hectares in Lampung. Currently, some 12,000 hectares of this land has been cultivated, Sudarmo said.

The company booked a Rp 37.7 billion net profit during the first half of this year, a drastic increase over the Rp 18 billion net profit it saw in the whole of last year.

Sudarmo was optimistic the company would realize a net profit of Rp 82 billion this year on the back of the company's increasing revenue and the country's improving business climate.

TBL was established in 1973 and is an affiliate of agricultural based consumer products manufacturer Sungai Budi Group. The group, founded in 1947, is the parent company of publicly listed tapioca starch manufacturer PT Budi Acid Jaya. (udi)