The Indonesia Stock Exchange (IDX) will start in November to shorten by one business day the standard settlement cycle for stock transactions from three days currently, to ease trade across continents and boost international competitiveness. (Reuters Photo/Iqro Rinaldi)

Development Firm Cahaya Sakti Eyes $2m From IPO in May


APRIL 17, 2017

Jakarta. Local property development company Cahaya Sakti Investindo Sukses is planning to raise up to Rp 198 billion ($2.10 million) from an initial public offering in May to widen its working capital and pay off debts.

The company plans to sell 207 million new shares – representing nearly 16 percent of its enlarged capital – at offerings between Rp 650 and Rp 960 per share.

Cahaya Sakti (CSIS) appointed Ciptadana Sekuritas Asia as its underwriter for the sale next month.

CSIS scheduled a book building period for April 17-26 and an offering period for May 3-5 ahead of its listing on the Indonesia Stock Exchange (IDX) on May 10.

The company plans to distribute 78 percent of the proceeds to its working capital to develop the initial construction of a 30-hectare property project, dubbed "Olympic City," in Bogor, West Java.

"We will conduct the groundbreaking of the first phase of the Olympic City project in August this year," CSIS finance director Lukas Maulana Yusuf told reporters on Monday (17/04).

The first phase of the project will encompass six hectares –  land valued at Rp 4.8 trillion –  and include a modern shopping mall, a two-tower apartment complex, a four-star hotel and a cancer-specialized hospital.

That phase is slated to be complete by late 2019 or early 2020.

To help develop and expedite the completion of the later stages of Olympic City, CSIS might seek partnerships with other local and international companies.

"We are currently in talks with an Australian company to help us build the hotel, and a British company to help us build the hospital," CSIS project and business development director Yanes Pasaribu said.

The company plans to maintain majority stakes in any partnership agreement it signs.

Meanwhile, at least 12 percent of its IPO proceeds will be used to fund capital expenditures, including heavy machinery equipment.

The remainder of the proceeds will be used to pay back company debts to banks.

CSIS booked an outstanding debt of Rp 52.5 billion from China Construction Bank (CCB), which will mature in October. That sum stems from a leftover Rp 100 billion the company borrowed from CCB in 2016.

Cahaya Sakti Investindo Sukses, established in 1995, initially began as a furniture distribution company, thought it quickly diversified and since 2016 has focused on property development projects.

CSIS is affiliated with the Egypt-based Olympic Group, a furniture producer established in 1982. The company produces household furniture, including bedroom, living room, kitchen and dining sets.