MPPA Plans $55.4m Rights Issue This Year

Jakarta. Matahari Putra Prima, or MPPA, one of Indonesia's largest listed retailers, plans to raise up to $55.4 million from new shares in a pre-emptive rights issuance to support its expansion later this year. 

Under the plan, Matahari Putra would raise Rp 500-800 billion ($34.6-55.4 million) from the issuance, subject to the Financial Services Authority's [OJK] approval. 

"The rights issue funds will be used to strengthen the company's balance sheet and working capital to support the company's strategy to become a retailer with a leading Omnichannel, strengthen network or logistics, and big data analysis capabilities," Danny Kojongian, Matahari Putra Prima's corporate secretary, said in an incidental public expose on Thursday. 

The plan came after Multipolar, Matahari Putra Prima's parent company, sells 11.9 percent of its shares in the latter to three separate investors for an undisclosed amount earlier this month, paring its controlling ownership in the retailer to 38.33 percent from previously 50.23 percent.

Multipolar has pledged to put pack the proceeds from its divestment into MPPA, Danny said.

Panbridge Investment and Threadmore Capital bought 3.33 percent and 3.8 percent, respectively, while Jakarta-based Pradipa Darpa Bangsa bought 4.76 percent. 

Pradipa Darpa Bangsa was rumored to be affiliated with Indonesia ride-hailing and food delivery giant Gojek Indonesia because the two share the same building address. Still, both Matahari Putra Prima and Gojek Indonesia refused to comment on the rumor. 

"Regarding the investors, we have disclosed all the information we have until now to the bourse and OJK," Danny said. 

Still, Danny said the three companies would add diversity among Matahari Putra Prima's investors and lend "a more positive color" to the company. 

As of late December last year, Matahari Putra Prima operated Hypermart, Foodmart Primo, Smart Club, Hyfresh, Boston Health & Beauty stores, and FMX with 208 outlets in 73 cities in Indonesia with a network of 3,400 suppliers.

The company managed to trim its losses to Rp 405.3 billion last year, down from the previous year's net loss of Rp 552.7 billion, thanks to several innovations the company implemented to counter the Covid-19 pandemic slump. 

Operating revenues reached Rp 6.75 trillion, comprising Rp. 6.67 trillion direct sales and consignment sales of Rp 495.8 billion.

The company's assets rose 18.05 percent to Rp 4.51 trillion in 2020, from Rp 3.82 trillion as liabilities rose 31 percent to Rp 4.33 trillion last year. The equity was at Rp 184.7 billion.