14 June 2022 (closed)
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With the new minimum requirement regarding the free float of shares (the portion of shares that are in the hands of public investors) at 7.5 percent of a company’s total enlarged capital, the Indonesia Stock Exchange (IDX) urges companies that do not meet this requirement to conduct a rights issue in order to raise the number of publicly issued shares. One of these companies is HM Sampoerna, Indonesia's largest tobacco company. Currently, 98.18 percent of the company is owned by international cigarette and tobacco giant Philip Morris.
Prior to the designing and implementation of the new minimum requirement, the Indonesia Stock Exchange (IDX) had already requested HM Sampoerna several times to increase its free float. One of the reasons being that HM Sampoerna is one of the largest Indonesian companies in terms of market capitalization. In fact, in March 2013 HM Sampoerna was temporarily the country’s largest company, surpassing Astra International, one of Indonesia’s largest diversified conglomerates.
Per 30 January 2014, all listed companies at the Indonesia Stock Exchange (IDX) are obliged to have publicly issued at least 7.5 percent of the company’s total number of shares. However, in order to soften the impact of this rule, companies are given two years to adjust to the new situation. If this requirement is not met within that time frame, de-listing of a company is one of the possible repercussions.