23 June 2018

Jakarta– Palm oil company, PT Mahkota Group Tbk plans to conduct an initial public offering (IPO) by releasing a maximum of 703,688,000 shares or 20 percent of the issued and fully paid capital. With an offering price of IDR 200-250 per share, the company has the potential to reap fresh funds from the stock exchange floor ranging from IDR 140.7 billion to IDR 175.9 billion.

“IPO funds are used for business development,” said President Director of PT Mahkota Group Tbk, Usli, in Jakarta on Friday (22/6).

He revealed that around 60 percent of the IPO funds were used to develop the downstream industry through investment in PT Mutiara Unggul Lestari's (MUL) subsidiary, PT Intan Sejati Andalan (ISA). The company will build a refinery and kernel crushing plant in Bengkalis Regency, Riau. “The construction of the plant will take 8 months,” he said.

Usli explained that the construction of the refinery and kernel crushing plant is to provide added value because the company can carry out a refining system that produces olein derivative products (edible oil), sterin (raw material for margarine and oleochemicals) and other derivative products. “With the development of the downstream industry, the company hopes to increase revenue,” Usli said.

Usli explained that around 40 percent of the IPO funds were used as working capital for subsidiaries, namely PT Mutiara Unggul Lestari, PT Berlian Inti Mekar and PT Intan Sejati Andalan.

Usli is also optimistic about the future prospects of oil palm plantations. Oil palm is the highest oil-producing crop per hectare of all vegetable oils. In higher oil-producing countries, the average yield of oil palm is about 4 tons of oil per hectare per year, more than double the oil production per hectare from rapeseed and four times the oil production per hectare from soybean and sunflower seeds.

Palm oil, he said, requires a smaller plantation area than other vegetable oils to produce the same oil. The production cost per ton of palm oil is also lower than other vegetable oil-producing crops.

Indonesia, he said, is the largest CPO producer in the world. As of October 2017, Indonesia's CPO production was 34.04 million tons and its CPO exports were 26.73 million tons. “Indonesia's CPO production is expected to grow by 7 percent YoY in 2017/2018,” Usli said.

Meanwhile, the company has appointed PT Panin Sekuritas Tbk as the IPO underwriter. If the effective statement is obtained on June 29, 2018, the public offering period will be held on July 3-9, 2018 and listed on the Indonesia Stock Exchange on July 12, 2018.

Source : http://www.beritasatu.com/ekonomi/497814-mahkota-group-bidik-dana-ipo-rp-1759-miliar.html