IPO of State Port Operator Pelindo III after Indonesia's 2014 Elections
Pelabuhan Indonesia III (better known as Pelindo III or Indonesia Port Corporation III), the state-owned company that is responsible for the management, regulation, maintenance and operation of ports in Central Java, East Java, Bali, South Kalimantan, Central Kalimantan, West Nusa Tenggara and East Nusa Tenggara, may conduct its initial public offering (IPO) on the Indonesia Stock Exchange in the fourth quarter of 2014 if market conditions are conducive after the legislative and presidential elections of 2014.
The company deliberately wants to wait and see for results of the legislative election (9 April 2014) and presidential election (9 July 2014) first before deciding to conduct this corporate action. The market already showed that it supports Joko Widodo (Jokowi) as next Indonesian president. When on Friday 14 March 2014, Jokowi declared to join the presidential bid, Indonesia's benchmark stock index immediately jumped 3.23 percent. Although this 'Jokowi-effect' only lasted one day, a more structural effect is expected if he would be elected by the Indonesian people on 9 July 2014.
Within a month, Pelindo III will issue both rupiah and US dollar-denominated bonds (worth at least USD $400 million) with a tenor of seven years. The issuance has already been agreed upon in the company's annual general meeting in November 2013. The funds generated through this bond-issuance will be used for debt settlements as well as a number of construction projects (such as Pelabuhan Tanjung Emas, Tanjung Perak and Tanjung Benoa).
In 2013, Pelindo III recorded a net profit of IDR 1.2 trillion (USD $106 million), 35 percent of which will be paid out in dividends to the company's shareholders (the Indonesian government is Pelindo III's sole shareholder).
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