Cikarang Listrindo is looking to raise Rp3.5 trillion to expand its power production capacity. With the IPO price Rp1.970 per share, its ratio Price-to-Book Value (PBV) will be 7.35 times. Worth it? Yes, for certain investors.
As of December 31, 2015, total assets of the Company is US$ 1 billion or equivalent to Rp 13 trillion with the the equity value of US$ 337 billion, or equivalent to Rp4,55 trillion. With the number of shares outstanding of 17 billion shares, the book value per share is only Rp268 / share.
The Company’s revenues in 2015 were US$547.9 million (equivalent to Rp7.4 billion) with net income of US $ 80 million (equivalent to Rp1.08 trillion or about Rp63 / share) and net cash flow from operating activities amounted to US$ 147 million (or Rp19,1 trillion). With capacity utilization has reached 95%, there is no potential for further growth can be expected from the current assets.
Bank of Singapore categorized the Company as an investment that has a fairly high risk profile, ie a rating of 4 out of 5, where 5 is the most risky.
The utilities sector attracts investors with long-term perspective, has a strong fund and regular cash needs, and may have their own agenda within the framework of a greater infrastructure development. And maybe the price is expensive to eliminate unwanted investors namely retail and non strategic investors.
Information on Cikarang Listrindo’s Public Offering
PT Cikarang Listrindo Tbk is an independent power producer (IPP), which supplies electricity exclusively to the five industrial estates in the area of Cikarang, West Java, with a concession until 2036. The fifth area was included Jababeka Industrial Park East Java, Megapolis Manunggal, Mount Ceremai Core (Lippo Cikarang) and Hyundai Inti. Customer base are mostly multinational companies. The Company also sells electricity to PLN on the take-or-pay basis. Contribution from the industrial area to total revenues was 70%.
The Company initially offered 15% stake to raise funds up to Rp 5 trillion. But then President Andrew K. Labbaika said the company decided to offer 1.6 billion shares, or a maximum of 10%, or about 1.7 billion shares with a range of Rp1.430-Rp1.970 per share. The reduction makes the maximal funds collected is reduced to only Rp3.35 trillion.
Cikarang Listrindo plans to use 70% of the IPO proceeds to increase power generation capacity, both in the existing facilities and new. The company plans to build power plants and steam gas, or coal-fired. The capacity is now 755MW natural gas-powered generator. With the IPO proceeds, the Company will wake 109MW gas-fired power generation and the coal-fired 280MW.
In addition, as many as 30% remaining IPO proceeds will be used for working capital needs. These funds are expected to support operations related to the company’s general and administrative expenses, selling expenses, and funding.
The Company appointed four underwriters effects (lead underwriter), namely PT Indo Premier Securities, PT Citigroup Securities Indonesia, PT Deutsche Securities Indonesia and PT UBS Securities Indonesia.
The Company also conducts employee stock allocation program (ESA) as much as 3% of the number of shares offered in the IPO or as many as 76.65 million shares.
After the IPO, the ownership of PT Udinda Wahanatama in Cikarang Listrindo will be 30.92% from before the IPO that as many as 36.38%. While the ownership of PT Pratama Industry Brasali diluted to 27.04% from 31.81%, PT Pentakencana Pakarperdanna be 27.04% from 31.81%, the public will control 14.55% and employees 0.45%.
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