Hutama Karya Unit HK Realtindo Plans IPO on Indonesia Stock Exchange
Indonesia-based property developer HK Realtindo, subsidiary of state-owned firm Hutama Karya, plans to release a 30 percent stake through an initial public offering (IPO) on the Indonesia Stock Exchange in the fourth quarter of 2016. Funds generated through the IPO will be used for further business expansion. The company eyes 30 new projects in 2016, including the Trans Sumatra toll road. The company also plans to issue IDR 500 billion (approx. USD $36 million) in bonds and IDR 250 billion in medium term notes.
Last year HK Realtindo had already issued IDR 550 billion in medium term notes in order to finance land acquisition and operational costs for its seven new projects in Cengkareng, Sawangan, Surabaya, Semarang, Yogyakarta, Cibubur and Bekasi. Most of these projects involve landed houses projects. The company also plans to construct five hotels this year.
In 2015 HK Realtindo collected IDR 600 billion (approx. USD $43 million) in revenues and IDR 150 billion in net profit. This year the company targets revenue to rise to IDR 2.2 trillion and net profit at IDR 220 billion.
Hendy Pagar Alam, Commercial Director of HK Realtindo, said the company is ready to go public. However, it waits for the fourth quarter as it does not want to conduct an IPO too close to the IPO of Wika Gedung, unit of another state-controlled construction company, Wijaya Karya. Pagar Alam said the IPO of HK Realtindo might be less attractive for investors in case both companies go public around the same time.
Further Reading:
• Overview and Analysis of Indonesia's Property Sector