JAKARTA (TheInsiderStories) – Public listed company, PT Lippo Karawaci Tbk (IDX: LPKR), announced that it has divested its non-core assets First REIT, it said on Thursday (04/16). Since the second quarter of 2019, the developer has sold the 10.5 percent REITs for Rp850 billion (US$54.84 million).
The transactions were completed over the past one month. The divestment is part of the management’ strategy to divest non-strategic assets. In the first quarter alone the company raised over Rp300 billion in cash, said the CEO.
Unit of Lippo Group also reported has increased its stake in its two units, PT Siloam International Hospitals Tbk (IDX: SILO) from 51.10 percent to 55.40 percent ownership and PT Lippo Cikarang Tbk (IDX: LPCK) from 81 percent to to 84 percent. The company is buying the shares at a compelling discount to industry.
Lippo Karawaci bought 70 million shares of Siloam at an average price of Rp5,779 and 80 million shares of Lippo Cikarang with average price of Rp600. The acquisitions were completed in two separate transactions over the past four weeks.
The transactions were financed with excess cash received from the divestment of First REIT, and the total cash outlay was Rp452.5 billion. According to CEO of Lippo Karawaci, John Riady, with the acquisition the company now focus on its core business, property and healthcare.
“In this unprecedented time, our internal analysis reflects that the most prudent actions are to conserve cash or modestly increase our stake in our key subsidiaries,” he said in a written statement today.
Listed on the Indonesia Stock Exchange, Lippo Karawaci is one of Indonesia’ leading integrated real estate company with total assets of $4.0 billion at Sept. 30, 2019. The core business comprises urban residential developments, lifestyle malls and healthcare. We are also actively involved in integrated developments, hospitality, township development and management, as well as asset management services.
Currently, the company has a presence in 35 cities with 1,461 hectares of land bank ready for development. Through its two publicly listed subsidiaries, Lippo Cikarang and PT Gowa Makassar Tourism Development Tbk (IDX: GOWA), of which LPKR owns 84.0 percent and 62.7 percent respectively, the developer build and operates urban developments in Bekasi and Makassar.
Additionally, Lippo Karawaci owns 55.4 of Siloam Hospitals, a private hospitals network with 36 hospitals across 24 cities nationwide. The company also has an ownership stake in a listed REIT in Singapore, namely Lippo Malls Indonesia Retail Trust with $1.4 billion of assets under management as of end 2019.
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