Jun 9, 2011

Salim Ivomas gains 10% on trading debut

Shares of PT Salim Ivomas Pratama, an agribusiness unit of Indofood Agri, gained 10% or Rp110 to Rp1,210 in its first trading debut at the Jakarta Stock Exchange as of 10.00 a.m. local time.
Salim Ivomas set the price for initial public offering (IPO) at Rp1,100 per share, representing a total proceeds raised from the offering up to Rp3.47 trillion. The company sold 3.16 billion new shares or 25% of its enlarged capital.
Salim Ivomas will allocate 40% of the proceeds to settle bank loans, 50% for funding plantation division, particularly for new planting and maintenance, and constructing processing facility, while the remaining 10% is to finance oil and fat division, especially to build up production facility and purchase vessel. Half of the proceeds will be used gradually within five years.
The company allocated Rp2.2 trillion for capital expenditure. Salim Ivomas, which owned 59.48% shares of an oil palm plantation company PT PP London Sumatra Indonesia Tbk, plans to expand its palm oil plantation area by 15,000 hectare per year. Total planted area will increase more than a half from 205,000 hectare this year to 280,000 hectare in the next five years.
The palm oil production this year is estimated to increase 10% to 740,000 tons compared to last year. Meanwhile, the company targets to increase the sugar cane plantation area by 18,000 hectare in the next 2 years.

Disclosure: No position at the stock mentioned above.

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