Lippo Offload Lippo Karawaci Shares at 21% Discount

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Friday, 25 November 2011 21:08

Written by Patrick Chang/YA

Lippo Offload,Lippo Karawaci, Shares

Theindonesiatoday.com - Lippo China Resources (LCR) Ltd offloaded 480 million shares of PT Lippo Karawaci (LPKR) Tbk at 21% discount to Vantro Investment Limited, a company incorporated in Labuan, Malaysia.

Vantro agreed to pay Rp500 per share of LPKR or about 21% discount over the 5-day average closing price of the shares (Rp632) for the period ended November 24th, 2011. LCR identified Vantro as an independent third party.

Vantro agreed to pay 10% initial payment and 90% in deferred payment of the total consideration of Rp240 billion. After the completion of the disposal, the Lippo Group, through the LCR Group, will remain to hold 172,842,395 shares in LPKR.

Lippo and LCR are of the view that such a discount on market price is fair and reasonable in view of the global economic outlook taking into account impact of the European debt crisis, the continuing currency tensions, and the fragility of the banking sector in some advanced countries and taking into account the relatively high price to earnings ratio of LPKR in 2010 and 2011 as compared with that of the industry in Indonesia and also, the comparatively low dividend yield of LPKR as compared to that of the industry in Indonesia and that the LPKR Shares represent quite a large block of shares which would likely lower the market trading price if sold all at once on the IDX.

LPKR shares closed lower by 1.59% to Rp620 Friday (Nov 25). The stock has dropped 29% from its peak (Rp870) this year. (Theindonesiatoday.com)

Lippo China Resources Lippo Karawaci

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