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Adhi Karya Seeks Rp 800b From Market for Tall Tower
Faisal Baskoro | November 21, 2011

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The building of Indonesia’s tallest office tower is among a swag of projects state-controlled construction company Adhi Karya is intending to advance with the funds raised from the issue of Rp 800 billion ($89 million) in new shares, a top executive says.

Kiswodarmawan, Adhi’s president director, said on Monday that the company needed the funds to help it finance construction projects including a 100-storey office tower in South Jakarta, a toll road project in Bali and several power plant projects.

“We need to raise fresh funds of around Rp 800 billion,” Kiswodarmawan said.

He added that State Enterprises Minister Dahlan Iskan had approved the plan. Adhi Karya is currently 52 percent controlled by the government.

“The ministry’s given its support. We also need approval from lawmakers. The rights issue may be carried out in the second half of 2012,” Kiswodarmawan said.

Kiswodarmawan said the company, established in 1960, was building an office tower that would be the tallest in Indonesia. It would probably be located in Senayan, South Jakarta.

Kiswodarmawan said the company would use Rp 500 billion of the proceeds from the planned rights offering to finance the construction of the tower.

It will cost Rp 1.65 trillion, with the remainder of the cost being met with bank loans, Kiswodarmawan said. He did not provide details on its toll road projects in Bali and East Java.

Bertrand Reynaldi, head of research at e-Trading Securities, said that Adhi, which relies mostly on government infrastructure projects, might suffer from slower government spending.

The government has trimmed the economic growth forecast next year to reflect the impact of the possible global slow down.

Bank Indonesia forecast the economy, which expanded by 6.5 percent in the third quarter, would expand 6.5 percent this year and 6.5 percent in 2012.

“The central bank has cut its economic forecast for 2012, from 6.7 percent to 6.5 percent and this could translate into slower government spending,” Bertrand said.

Former State Enterprises Minister Mustafa Abubakar said previously that the government received the design of the tower from two senior businessmen, Ciputra and Tommy Winata.

Adhi’s corporate secretary, Kurnadi Gularso, said the tower would be built between 2012 and 2016. The company is eyeing a 14 percent increase in revenue to Rp 8 trillion.

Share in Adhi fell 1 percent to Rp 475 on Monday. The shares have fallen 48 percent so far this year.