Bumi Serpong Seeks to Raise Capital in Rights Issue

Bumi Serpong Damai, an Indonesian property company based in Jakarta, plans to raise as much as Rp 175 billion ($18 million) from the sale of shares in a rights offering this year.

The property company plans to sell its 1.75 billion new shares in a limited public offering at a price of Rp 1,691 apiece, it said in a brief prospectus published in Investor Daily on Wednesday.

Bumi Serpong is expected to seek shareholder approval for the planned share sale later this month.

“The company will hold an extraordinary shareholders meeting on May 31, seeking approval from shareholders,” the company said in the prospectus.

The price reflects a 5 percent discount to the company’s closing price at Rp 1,780 in the local bourse on Wednesday.

Bumi Serpong will use the funds to buy land, expand projects and boost operational cash, according to the prospectus.

Shares in the company closed unchanged at Rp 1,780 on the Indonesia Stock Exchange on Wednesday, compared with a 0.2 percent gain in the mains stock gauge in the local market.

The company develops ambitious urban planning schemes in Indonesia in which it combines housing, business and commercial properties.

Bumi Serpong’s  first project, BSD City, encompasses a total area of approximately 6,000 hectares in Serpong, Tangerang. With around three quarters of the available land yet to be developed, this huge scheme represents a unique investment opportunity.

The company, managed by the Sinarmas Developer and Real Estate, earlier this year said it was seeking Rp 5 trillion in sales from a new mixed-used property project at BSD City.

The unnamed property project, located 25 kilometers southwest of Jakarta, includes residential areas, commercial buildings and green space. It will be built and operated by Bumi Parama Wisesa, a joint venture between BSD and Hongkong Land, the property arm of Hong Kong-based Jardine Matheson Holdings, the company said.

The 68-hectare project is being built in several stages and is due for completion in 2018.