Jakarta. State-controlled Semen Indonesia, the country’s largest cement manufacturer, plans to spend up to $4.3 billion in capital expenditure within the next five years to expand its production capacity.

Semen Indonesia has earmarked a capex of approximately $687.7 million for 2015 and $1.28 billion for next year. It then plans to spend $1.06 billion in 2017, $577.79 million in 2018 and finally, $656.3 million in 2019.

The publicly listed company will fund its five-year expansion plan through a combination of internal cash and bank loans. It may also issue bonds to restructure its financing, said Semen Indonesian finance director Ahyanizzaman.

“The funding source will depend on market conditions when the plan is realized,” he said in Jakarta on Sunday.

The manufacturer will spend the largest portion of the capex fund next year when it rushes to complete construction of its new plants in Rembang, Central Java, and Indarung, West Sumatra. Both factories are scheduled to be completed in the third quarter of 2016.

“[The plants] are part of a multi-year project that started last year. We plan to invest up to Rp 3 trillion [$222,626] by the end of this year for Indarung and Rembang and the rest will be spent next year,” Ahyanizzaman said.

Each plant will have an annual production capacity of three million tons of cement. The Indarung plan is estimated to cost up to $352 million, while the plant in Rembang will require an investment of $403 million.

Semen Indonesia’s production capacity is estimated to reach 32.3 million tons to this year, a 1.5 percent increase from 31.8 million tons last year. With the new plants, the figure is forecast to reach 38.3 million tons by 2016.

On top of these two projects, Semen Indonesia is currently building a $61.1 million cement grinding plant in West Java, as well as a $49.3 million waste heat recovery power generator with a 30.6 megawatt capacity. Both are scheduled to be completed in the second half of 2016.

Ahyanizzaman said the company was also planning to build a new cement plant in Aceh in the same year.

“If we can start building the plant in Aceh next year, construction should be complete in 2019. The investment value will probably be similar to the plant in Rembang,” he added.

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Jakarta. State-controlled Telkom will spend Rp 1.8 trillion ($135 million) this year building 2,000 new telecommunications towers through a subsidiary, Dayamitra Telekomunikasi Indonesia, or Mitratel.

Mitratel has already built 1,000 cellular towers this year using its own funds, president director David Bangun said earlier this week. The funding for the new towers will come from bank loans.

The building spree is part of Mitratel’s bid to achieve revenue growth of 50 percent this year, David said.

Mitratel owns and operates 6,260 cellular towers across the country, which it rents out to sister company Telkomsel, Indonesia’s biggest cellular carrier.

Telkom last October planned to swap a 51 percent stake in Mitratel with 13.7 percent of shares in rival Tower Bersama, majority-owned by investment firms Saratoga Capital and Provident Capital.

However, the State-Owned Enterprises Ministry and the House of Representatives have not agreed to the deal. The government owns a 51 percent stake in Telkom.

The government has asked the State Development Finance Comptroller (BPKP), the Attorney General’s  Office, the Supreme Audit Agency (BPK) and Corruption Eradication Commission (KPK) to review the share-swap offer, which expires at the end of March 2016.

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Jakarta. Garuda Indonesia, the national flag air carrier, will spend as much as $1.85 billion to acquire 24 new planes over the next three years.

The new fleet includes 11 Airbus A330s, nine ATR turboprop planes, three Boeing 777-300s and one 737-Max. The state-controlled carrier has started the purchase this year, ordering up to 15 new aircraft.

I Gusti Ngurah Akshara, director of finance and risk management at Garuda Indonesia, said that the aircraft began arriving in Indonesia starting from June this year and keep coming through December 2017.

About 80 percent of the order will be financed through an operating lease, while the remaining 20 percent will be through a financial lease, according to the director. Still, he pointed out that the scheme may change in the next three year “depending on market condition and internal management.”

The new order follows Garuda Indonesia’s $20 billion deal with Airbus in Paris last month in which the airline is slated to acquire 30 787-900 Dreamliners aircraft and 30 737-Max jets.

“The initial agreement in Paris is estimated to supply aircraft until 2025. We’re still evaluating the next process,” the finance director said.

Garuda Indonesia is planning to add nine more units of wide-body aircraft to its fleet — which currently has 22 wide-body aircrafts — in a target to operate as much as 53 units of wide-body aircrafts by 2025, according to the company’s president director Arif Wibowo.

Last month Arif was quoted by local media saying the State-Owned Enterprises Minister Rini Soemarno asked the airline to grow its fleet to 450 aircraft in the next five years from its current fleet of 136 aircraft as of the first quarter, according to Reuters.

Improving financial performance

After reversing last year’s losses to a $11.4 million net profit in the first three months of the year, Akshara said that the airline’s first-half performance is slated to improve on the back of Garuda Indonesia’s $62 million efficiency efforts.

“The growth of revenue and net profit for the second quarter of the year is better than the quarter before. Up until June, we’ve lowered costs by more than 14 percent,” he said, adding that Garuda Indonesia aims to trim up to $212 million of cost by year-end.

Akshara also said that Garuda Indonesia’s improving financial performance is backed by the positive performance of subsidiaries, such as the aircraft maintenance and facility unit Garuda Maintenance Facility and low-cost unit Citilink.

Garuda Indonesia is aiming for $4.4 billion in revenue this year, up 12 percent from last year’s revenue of $3.93 billion.

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Jakarta. Rimo International Lestari, a listed department store operator, seeks to raise up to Rp 8.1 trillion ($610.7 million) from a pre-emptive rights issue in order to buy out property developer Hokindo Mediatama, hinting a possible backdoor listing of the property company.

In an official statement on Monday, the Jakarta-based company — formerly known as Rimo Catur Lestari — said that it’s planning to issue 30.6 billion new shares with a nominal value of Rp 250 a piece. 

Each shareholder will be entitled to 90 new shares, offered at price of Rp 265 each, the statement said. Shareholders who don’t participate will see up to 98.9 percent of its ownership diluted after the rights issue, while Singaporean investment firm Haven Capital will be acting as the standby buyer, according to the statement.

Funds from the new shares sales will be used almost entirely to acquire a 99.98 percent stake of Jakarta-based Hokindo Mediatama, and also to later inject more capital into the company.

Hokindo Mediatama, whose 99.99 percent is currently controlled by Fajarindah Megah Perkasa, has experience in developing property — from malls and apartments to residential blocks — within integrated townships across Indonesia, including Jakarta, Banten and Kalimantan.

Following the acquisition, Rimo’s total asset will jump to Rp 8.81 trillion from the current Rp 17.69 billion.

Analysts are speculating that the planned acquisition is a way for Hokindo Mediatama to list on the local bourse without an initial public offering, given the quantity of the transaction and the different line of business that both companies operate.

“Also, [Rimo] is planning the rights issuance and acquisition at a time when its financial performance and expansion plans are declining,” said Reza Nugraha, an analyst at MNC Securities, adding that he believed the transaction would be beneficial for both companies.

Rimo posted a net loss of Rp 868 million in the first quarter, compared to Rp 1.1 trillion in the same period last year, while revenue declined by 25 percent to approximately Rp 20 million.  

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Yangon. Lippo Group, one of Indonesia’s largest conglomerates, launched on Saturday its first hospital in Myanmar, as part of the group’s plan to spend $1 billion to build 20 hospitals in the country over the next three to five years.

The Mekong-river country serves as Lippo’s stepping stone in its expansion in the Southeast Asia region.

“We will build six to seven hospitals in Yangon, while the rest will be outside Yangon,” said Lippo chief executive James T. Riady, on the sidelines of inauguration of Pun Hlaing Siloam Hospital, its first joint venture hospital in Yangon, Myanmar, on Friday.

“The investment value of one hospital including the land is around $50 million,” he said.

Last year, Lippo entered a cooperation with Serge Pun & Associates (SPA) Group, a hospital developer controlled by Myanmar businessman Serge Pun. SPA Group’s Pun Hlaing Hospital was established nine years ago and specializes in neurosurgery.

Pun Hlaing Siloam Hospital is located in Pun Hlaing Golf Estate in Yangon, and has a capacity of 174 beds.

Serge Pun, SPA Group chairman, said he can see the similarity of his vision with Lippo’s in aiming to provide high-quality health services.

James said that Lippo will continue its cooperation with SPA Group in developing hospitals in Myanmar. Still, SPA Group reserves a right to invite a third party to participate in the future investment, he said.

Lippo will rely on its internal capital to fund the Myanmar expansion, James said. The banking system in Myanmar is far from being developed to finance such a large project, he said. In addition, around 200 business groups in Myanmar are still on the blacklist of American and European banks, constraining those companies’ ability to raise funding from global capital market, James said.

James said that Lippo also is setting its eyes for hospital expansion in Nepal, Sri Lanka, Cambodia, and Vietnam. The group plans to enter Nepal in 12 to 18 months, James said, followed by Sri Lanka.

The hospital business spearheads Lippo’s strategy in learning regulations and licensing policy in the respective countries, before deciding to invest in other business such as shopping mall and property development, James said.

Investor Daily and the Jakarta Globe are affiliated with Lippo Group.

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Jakarta. State-controlled construction company Waskita Karya has set the offering price for its planned rights issue at between Rp 1,300 and Rp 1,650 per share, a company director revealed in a statement last week.

The builder plans to sell 4.08 billion shares, or 29.1 percent of its equity, which means proceeds from the rights issue are expected to reach Rp 5.3 trillion to Rp 6.73 trillion ($ 408 million to $517 million).

Shareholders in control of 100,000 existing shares will be given the chance to purchase between 32,385 and 41,104 shares before any other investors.

The company said it expected to secure approval from the Financial Services Authority (OJK) on June 8 and plans to hold an extraordinary general meeting of shareholders on June 10. The state builder has set a listing date of June 24.

In a presentation to the House of Representatives, executives revealed that Waskita Karya was currently working on five toll road sections worth a combined Rp 12.64 trillion.

The company is developing a 125-kilometer toll road project in southern Bali, Waskita president director M. Choliq said on April 23, for which the upcoming rights issue would provide Rp 3.16 trillion.

Waskita is also constructing a 500-kilovolt electric power transmission facility in Sumatra that is estimated to cost Rp 5.24 trillion, of which Rp 1.32 trillion is expected to come from the share sale.

The company is also planning a capital injection of Rp 4.3 trillion for its subsidiaries involved in property, toll road construction and the manufacture of precast concrete.

Of the amount, Waskita Toll Road will receive between Rp 2 trillion and Rp 3 trillion, Waskita Realty is set to get Rp 1 trillion, while Waskita Precast is to get Rp 300 billion.

The company has appointed Mandiri Sekuritas, Bahana Securities and Danareksa to manage the upcoming rights issue, according to Choliq.

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Jakarta. Five top executives are bidding to the lead board of directors at the Indonesia Stock Exchange (IDX) for the next three years, seeking to steer the bourse amid rising competition from regional peers.

IDX director of trading and membership Samsul Hidayat led the first team of seven that seeks to replace the current board, the exchange announced over the weekend. Rules indicate that any candidate must enter the competition as a team that will fill the entire positions of the board.

Leading other teams are state-controlled brokerage Mandiri Sekuritas’ chief executive Abiprayadi Riyanto, toll road operator Citra Marga Nusaphala Persada’s deputy chairman Tito Sulistio, state toll-road operator Jasa Marga’s finance director Reynaldi Hermansjah and local rating agency Pefindo’s president director Ronald. A. Kasim.

The teams will undergo a fit-and-proper test from May 1 to June 3 and will receive the results on June 4. Shareholders at the general meeting will approve of the winning team on June 25.

Nurhaida, who heads the capital market supervision at the Financial Services Authority (OJK), earlier said that the OJK has agreed to keep maintaining the number of board of directors at seven in order to stimulate Indonesia’s capital market and make it more competitive ahead of the Asean Economic Community, when trade is liberalized.

Beginning on Dec. 31, the AEC will allow greater flow of capital in the region, which in turn will increase competition among the region’s capital markets to attract funds.

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