Parliament Approves IPO Plan of Jasa Marga

The meeting of Working Commission of Privatization of the parliament on Tuesday last week has approved the plan of PT Jasa Marga to sell 30% stake in an IPO to get the capital of IDR2.5 trillion.

The member of Working Commission on Privatization, Andi Rahmat, said that the result of the meeting will be discussed at the level of Commission XI of the parliament.

"The privatization committee has approved the IPO plan of Jasa Marga. The approval has been on the maximum stakes of 30% and the scheme of IPO," he told me by telephone, last week.

It means, he said, there will not be any strategic sale to strategic investor. The Finance Director of Jasa Marga Reynaldi Hermansyah said the company is waiting for the decision of the parliament on the IPO plan.

The postponement of the IPO has raised the concerned that the company will violate the covenant and will drive a default to the creditors.

Jasa Marga said in a statement previously that the company has used up its borrowing capacity. At the end of 2006, the total debt of the company was IDR7.85 trillion, while the asset was IDR10.24 trillion and the equity was IDR2.83 trillion.

The company set the target to book the net profit of IDR249.24 billion this year, and IDR582 billion in 2008. In the next three years, the net profit should reach IDR887 billion, IDR739 billion and IDR1.27 trillion respectively.

An executive involving in the IPO plan of Jasa Marga said the company is likely to assign the consortium of Bahana Securities, Credit Suisse, Deutsche Securities Indonesia, and Citigroup to become the underwriter for the IPO.

Reynaldi said that there has not been any decision on who will become the underwriter.
There have been two other short-listed consortia. The first one is the consortium of Danareksa Sekuritas, Mandiri Sekuritas, and UBS Securities Indonesia. The other one is the consortium of BNI Securities, CIMB GK Securities Indonesia, and Macquarie.

Jasa Marga is developing three sections of toll road, the sections of Semarang-Solo, Gempol-Pasuruan, and Bogor ring road at the total length of 120 km