Mar 14, 2011

Arthavest to buy hotel operator Rp87 bio

Indonesia’s investment company, PT Arthavest Tbk, plans to dispose 99.98 stake in a brokerage company, PT Artha Securities Indonesia (ASI) to PT Artha Perdana Investment (API), valuing Rp90 billion. API is controlling shareholders in Arthavest with 53.56% stake.
In line with the brokerage sale, Arthavest also plans to acquire 51% stake in a hotel chain operator PT Sanggraha Dhika (SD), valuing Rp87 billion from Diamond Magic Enterprise Limited.
In the prospectus announced today, Arthavest plans to dispose ASI’s stock as the broker’s revenue is highly fluctuating and unstable.
Arthavest requires cash to finance the acquisition of the hospitality company. SD’s acquisition aims to increase Arthavest’s revenue to be more stable and in the end shall foster its business performance.
“Such acquisition is also part of business diversification in the sector that somehow may grant higher revenue and profit for the company,” he said in such prospectus.
Regarding to the stake acquisition of SD, Arthavest agreed to pay Rp1 billion to Diamond Magic at the very least 3 days subsequent to the agreement signing.
About Rp34 billion will be paid by Arthavest to Diamond Magic soon after it earns the approval from the extraordinary meeting of shareholders to be scheduled on 16 March 2011.
The remaining Rp52 billion will be delivered by Arthavest when the sale and purchase certificate is signed.
On the other side, API agreed to pay Rp1 billion to Arthavest at the least 3 days after the agreement is signed while the remaining Rp89 billion will be delivered by API when the sale and purchase certificate is signed.
SD packed Rp56.21 billion operating revenue, Rp15.16 billion operating income and Rp6.39 billion net income as per 30 September 2010.
Irwan Egon and Buntardjo Hartanto are acting as President Director and President Commissioner in SD.
Nearly 60% shares of API is owned by Sukardi Tandijomo Tang, 25% is controlled by Hasan Hartato Ng. Jasmin Janto and Jake Pison Hawila own 10% and 5% shares respectively.

Disclosure: No position at the stock mentioned above.  

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