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Two shipping companies, PT Pelayaran Nasional Bina Buana Raya and PT Pelayaran Nelly Dwi Putri, are planning to sell their shares to the public through an initial public offering (IPO) in an attempt to raise funds to support expansion amid growing demands on sea transportation.
Bina Buana Raya is planning to offload about 20 percent of its enlarged capital. Bina Buana Raya director Lie Ly said that her company expected to list its shares on the bourse in December.
“We will hold road shows [for the IPO] in Malaysia and Singapore and perhaps in Hong Kong,” Lie Ly said, adding that her company would use the funds raised from the IPO for expansion and loan refinancing.
Bina Buana Raya, which is 49 percent owned by Singapore-listed Marco Polo Marine Ltd., has appointed PT OSK Nusadana Securities and PT Dinamika Usaha Jaya as underwriters for the IPO.
According to Lie Ly, Bina Buana Raya now has 35 vessels to support two business divisions: the tugs and barges division, which transports commodities including coal, steel scarp and iron ore, and the offshore marine division, which represents the company’s efforts to meet growing demand from oil and gas transportation.
Meanwhile, Nelly Dwi Putri will release 350 million shares, or about 14.89 percent of its enlarged capital. The company has yet to announce how much it wants to raise from the IPO, but will start a book-building period on Monday.
Nelly is planning to sell its shares starting from Oct. 2 to 4 and list them on the Indonesia Stock Exchange (IDX) on Oct. 9.
Wientoro Prasetyo of PT Lautandhana Securindo, which manages the IPO of Nelly Dwi Putri, said that the company was optimistic about its plan to go public amid concerns of underperforming shipping companies listed on the bourse.
“The company [Nelly Dwi Putri] is domestically based and its fleet consists of tugs and barges, which make its business similar to MBSS [PT Mitrabahtera Segara Sejati]
but different from BLTA [PT Berlian Laju Tanker] and Arpeni [PT Arpeni Pratama Ocean Line], which are
suffering from a decreasing number of international routes,” Wientoro said.
Several companies have been listed on the bourse, including MBSS, BLTA, Arpeni (APOL), PT Samudera Indonesia (SMDR) and PT Humpuss Intermoda Transportasi (HITS). Among these names, MBSS is the leader in terms of financial performance in the first half of the year.
MBSS booked a US$18.2 million net profit in the first half of the year, a 34 percent increase compared to $13.6 in the same period last year. The increase was supported by a 27 percent surge in revenue to $68.1 million in the first half of the year versus $53.27 million in the same period last year.
BLTA has not filed its financial performance report of the first quarter to the bourse. BLTA is struggling with its debt settlements after it announced in early January that it was freezing the payment of $418 million debts that were due this year.
Meanwhile, HITS is also in a legal dispute with its creditors for the early termination of an agreement, under which the company’s subsidiary rented ships in 2007 and 2008. HITS said last week that it would seek further negotiation to reduce the amount of damage money it should pay to creditors.
Indonesian National Shipowners Association (INSA) chairperson Carmelita Hartoto said that Indonesia’s shipping business was actually growing despite the poor performances of these companies.
“Foreign shipping companies want to enter Indonesia’s market. They are looking for a new market following the crisis in their countries,” Carmelita said.
She added that banks also had big appetites to lend to shipping companies. “If a shipping company wants to go public now, it means that the firm sees brighter business [opportunities] and is well liked. Therefore, it wants to raise funds to support expansion and grab a bigger share in the market,” Carmelita said.
She added that Indonesian shipping business has been improving since the implementation of cabotage principle, which requires domestic cargo to be transported by Indonesia-flagged vessels.