June 16, 2017 3:43 pm JST

Indonesia's Starbucks operator looks for $2.8m in IPO

The listing will be limited to 1% of the Mitra Adiperkasa unit's shares

WATARU SUZUKI, Nikkei staff writer

People gather at a Starbucks in the Grand Indonesia mall in Jakarta. © Reuters

JAKARTA -- Starbucks' Indonesian franchisee will list 1% of its shares in an initial public offering on June 21.

MAP Boga Adiperkasa, a subsidiary of retailer Mitra Adiperkasa, will offer the shares at 1,680 rupiah (13 cents) and expects to raise 37.25 billion rupiah, according to a prospectus published on Thursday. The listing will give the company a market capitalization of around $280 million.

The unusually limited offering is due to a deal MAP Boga struck with General Atlantic, a U.S. private equity company, in November. In the deal, MAP Boga issued 725 billion rupiah in convertible, zero-coupon bonds to a General Atlantic unit. The bonds will be converted into a 19.9% stake in MAP Boga at the time of the IPO.

To list on the Indonesia Stock Exchange, a company is required to float a minimum of 7.5% of its shares to the public. MAP Boga is set to clear this hurdle because General Atlantic will be classified as a public shareholder, according to MAP Boga.

"We believe this was the best time" for the IPO, said Fetty Kwartati, Mitra Adiperkasa's head of corporate communications. The benchmark Jakarta Composite Index has gained 9% so far this year.

MAP Boga is the Indonesia franchise holder for five brands -- Starbucks, Pizza Express, Krispy Kreme, Cold Stone Creamery and Godiva. It has more than 300 shops in 20 cities. While Mitra Adiperkasa's department store division has been struggling, its food and beverage segment has been soaring. For 2016, MAP Boga reported revenue of 1.62 trillion rupiah, a 23% increase from the previous year, and net profit of 115 billion rupiah, a 43% spike.

Kwartati said Indonesia's cafe market will continue to expand as consumer spending shifts toward treats and experiences. MAP Boga is planning to open up to 60 Starbucks per year, and is converting a small portion of existing stores to the premium Starbucks Reserve brand. Mitra Adiperkasa is tapping General Atlantic's cost-management expertise as it expands.

Mitra Adiperkasa does not plan to offer additional shares in MAP Boga to the public, Kwartati said. Any more shares hitting the market would depend on General Atlantic selling down its stake once the value of the company increases.

General Atlantic did not immediately respond to a request for comment.

Asia300

PT Mitra Adiperkasa Tbk

Indonesia

Market(Ticker): JKT(MAPI)
Sector:
Industry:
Retail Trade
Department Stores
Market cap(USD): 813.96M
Shares: 1,660M

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