Kobexindo the Latest Company To Reduce Size of Planned IPO
Kobexindo Tractors, a heavy equipment distributor, has cut the scale of its initial public offering later this month, claiming the new size better reflects market concerns over the debt crisis in the euro zone.
The Jakarta-based company reduced the size of its share sale to 272.5 million shares, or 12 percent of enlarged capital. That was lower than the original plan of 858 million shares totaling 30 percent of enlarged capital. The scaleback means the company will raise just Rp 109 billion ($12 million), much lower than the original Rp 500 billion projection.
“The market remains uncertain because of the euro debt crisis, prompting the company to cut the size of its IPO,” said Johanes Soetikno, managing director of Valbury Asia Securities, an underwriter for the share sale.
The company said earlier this month that it would offer the shares at Rp 380 to Rp 520 apiece to investors in Indonesia and elsewhere in Asia next month. The company hired Mandiri Sekuritas and Lautandhana Securindo to help arrange the IPO.
Kobexindo posted total revenue of Rp 39 billion in the first quarter this year. The company has forecast its revenue to increase to Rp 2 trillion this year from last year’s Rp 1.3 trillion. Its net income rose to Rp 80 billion last year from Rp 20 billion in 2010.
Concerns over the euro debt crisis worsening have prompted some Indonesian companies to similarly reduce the size of their IPOs.
Toba Bara Sejahtra, a coal miner, announced this month that it would cut its share sale to 15 percent of its enlarged capital, or 317.9 million shares. That was lower than the original plan of 20 percent to 25 percent.
Global Teleshop, a mobile-phone retailer, cut the size of its IPO to 10 percent from the original plan of 20 percent. With the scaleback, the company will make a maximum Rp 127.8 billion from selling 11.11 million shares, or 10 percent of its enlarged capital. Global will offer the shares next week, from Monday to Wednesday, with a planned listing on the Indonesia Stock Exchange (IDX) on July 10.
Worries over the euro zone have escalated concerns in developing countries, including Indonesia, prompting foreign investors to sell assets. The benchmark Jakarta Composite Index rose 1.4 percent on Wednesday, bringing gains for the year to 3.2 percent.