Three Lippo Group Companies Plan Rights Issuances in Q1 2018
Jakarta. Retail and property companies under the Lippo Group, an Indonesian diversified conglomerate, plan to issue new shares in the first quarter next year to fund business expansion and working capital, their executives said.
Industrial township developer Lippo Cikarang, multi-format retail operator Matahari Putra Prima and urban developer Lippo Karawaci plan pre-emptive rights issuances in the first quarter next year. The proceeds raised by each company will be less than Rp 1 trillion ($73.8 million).
Lippo Cikarang shareholders have approved the rights issuance plan during an extraordinary meeting on Nov. 8. The company, which has developed an integrated real estate and light industrial park at Cikarang in Bekasi, West Java, will issue new shares at Rp 3,800 apiece, to raise around Rp 800 billion.
If shareholders do not exercise their rights, their stocks will be diluted by 27.04 percent. The company will use the proceeds of the rights issue for business and working capital.
Lippo Cikarang president director Ivan Budiono said in a statement that the company aims to complete the rights issuance plan in the first quarter next year.
"The plan is carried out as a step by the company to generate the capital necessary to fund the development of the company business, while at the same time maintaining its balance sheet profile prudently," Ivan said.
The developer controls a 3,250-hectare township, supported by various facilities, such as schools, hospitals, shopping malls and restaurants. The company is currently developing Meikarta, an integrated township project expected to become a residential and new growth center, 40 kilometers east of Central Jakarta.
The Rp 278 trillion project is also expected to have a multiplier effect in the region.
Meanwhile, Lippo Karawaci plans to hold rights issue in the first quarter of 2018 to raise Rp 600 billion, which will be used to fund business expansion and strengthening its capital. The shares will be sold at Rp 635 apiece
According to the Lippo Karawaci president director Ketut Budi Wijaya, the rights issuance plan will be subject to approval by a general shareholders' meeting on Friday (15/12). Shareholders who do not participate in the rights issue will see their ownership diluted by 5.99 percent.
"The rights issue will maintain its debt-to-equity ratio at a reasonable level. The company will continue to maintain its cash flow prudently, monitoring the company's costs and implement a capital recycling strategy that will boost the company's value," Ketut said.
Matahari Putra Prima also plans to issue 3 billion new shares in the first quarter next year, with the proceeds used to refinance debt and allocated as working capital.
Shareholders who choose not to exercise their rights will see their stocks diluted by 30.4 percent.
Matahari has yet to set the date of its general shareholders' meeting to seek shareholder's approval.
Matahari operates a network of more than 300 distribution points in 73 cities across the archipelago, 117 hypermarkets, 26 supermarkets, 30 convenience stores and 12 health and beauty centers.
The company has partnered with 3,168 food and retail suppliers and serves more than 15 million Indonesians annually.
The Jakarta Globe is affiliated with the Lippo Group.
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